Posts Tagged ‘Global Investments’

Democracy isn’t always fair

In Corporate governance on 19/11/2009 at 5:43 am

What with substantial shareholders upset with management decisions at Global Investments and M-REIT, the link below is an antidote to all the mindless pontifications by corporate governance experts on the need for more shareholder democracy.

“[S]hareholders don’t necessarily know what’s good for them, and that companies need someone looking out for their best interests”

“There is also very little evidence that shareholder democracy works better than directors in deal-making. A number of academic studies suggest it is a wash.”

But before you think I am misquoting PAP on voters and democracy, the piece goes on “There will always be exceptions to every rule. Some boards make bad calls. [There you are, MM excepted, the PAP will never say this.]

‘“Look at the lost opportunity with Yahoo and Microsoft,” said Professor Sonnenfeld about the decision by Yahoo’s board to originally block Microsoft’s offer, a decision that probably lost Yahoo shareholders billions.

‘Professor Kaplan argues that both boards and shareholders will always make mistakes, but that when shareholders are in charge, “Net-net, the shareholder wins.”

‘And he may have a point: While Cadbury’s fate may now be in the hands of fast-money arbitrageurs, “some long-term investor had to make the decision to sell.” And selling is in itself a vote on the long-term future of the company.

‘Democracy is indeed messy.”

GIL: Worth Analysing?

In Investments on 16/11/2009 at 1:31 am

(GIL) surely must be worth further analysis as a special situation. Published NTA is 35 cents a share as at June while it is now trading at 25 cents (up 2 cents).

But I’ll give detailed analysis a miss as there will be a change of manager. The present manager is part of the defunct Babcock & Brown group (in fact GIL was once Babcock & Brown Global Infrastructure Fund). The directors want to appoint as manager a ST Gp company, while a shareholder with about 20% wants a relatively unknown Australian fund manager.

So better to wait to see who becomes the manager (there is EGM later in November). And in the meantime,  I will try to find out more abt both managers.