Since then, the company has been in turmoil. CEO Larry Mullin left last week, and board director Brett Paton resigned a few days before, reportedly in protest at the decision. Mullin’s exit quickly followed reports that Echo CFO Matt Bekier applied for a CFO position at Brambles during the Sid Vaikunta scandal earlier this year.
Fairfax
Fairfax has everything you need for an explosive AGM: wildcard shareholders such as Gina Rinehart, a disgruntled institutional registry who’ve had to put up with disastrous share-price falls, a chief executive who received a 50% pay rise this year, and an unendorsed candidate putting himself forward for the board.
Media analyst Peter Cox has put himself forward (for the third time) as a board nominee. The board, chaired by former Woolworths CEO Roger Corbett, have not supported the nomination, telling shareholders in the notice of the meeting that Cox does not possess the relevant management and board experience.
This has prompted some feisty criticism of the current board by Cox. He told Australian media writer Mark Day that “none of the directors appointed under Corbett’s process satisfies all the requirements to which they say I should be held. They also seek a cultural fit but, with no ethnic, religious or staff directors. I assume the fit required is with the culture of the chairman.”
Fairfax’s share price hit a record low today at 39.5 cents, down from 80 cents a share in February. Nonetheless, the going opinion is that Cox has little chance of gaining a seat, as institutional funds are expected to back the board’s recommendation.
Fairfax’s largest shareholder, Gina Rinehart, has not put forward any motions to be voted upon. But how she’ll vote is anyone’s guess, and with her 15% holding, there’s plenty of influence she could wield.
Fortescue
Fortescue may have gotten out of one continuous-disclosure pickle when the High Court found it hadn’t misled shareholders in 2004, but it got itself into another one this year, when it took a report in the Australian Financial Review to reveal the company had approached its lenders to have its debt covenants loosened. It is arguable that this is material information, which means it should have been disclosed to the market first.
At its AGM, on November 14 in Perth, Stephen Mayne says shareholders may also query the insistence of founder and chair Andrew ‘Twiggy’ Forrest on retaining control of the company, and “carrying too much debt and too much risk as a result”.
It’s widely speculated that the reason Fortescue hasn’t undertaken a capital raising this year is because Forrest is against it as it would dilute his 32% stake – another area shareholders might question.
Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.
