Solid Energy CEO Don Elder deflects a pie aimed at him by protesters, John Selkirk/The Dominion Post
For a then little-known Auckland accountant, Brierley Investments’ 1999 annual meeting on November 11 – World War I’s Armistice Day – proved a watershed event.
Bruce Sheppard was a Brierley shareholder angered at the company’s plans to shift its head office to Singapore and incorporate in Bermuda.
Sheppard rented an army-style helmet for $5, went to the meeting, and for the first time, stood up and vented his spleen.
That action, and subsequent media attention, set in motion a chain of events that led to the establishment of the Sheppard-chaired Shareholders’ Association in 2001.
Sheppard’s more recent actions – notably via his Stuff blog – include encouraging disgruntled investors to cut failed finance company directors out of mainstream society.
This followed news of angry punters physically attacking former Bridgecorp boss Rod Petricevic in an Auckland restaurant and the so-called German pensioner Zimmer-frame gang kidnapping, locking up and beating a financial adviser who lost $4 million of their money.
Sheppard’s outspoken stand against Hanover Finance founders Mark Hotchin and Eric Watson saw him out their other New Zealand business interests and business partners.
For the man who came to public prominence beneath an army helmet, if you’re a shareholder or stakeholder and have a beef with company directors or boards, you should make it known and there aren’t many limits.
‘‘Humans react emotionally,’’ Sheppard explains.
‘‘And there are no boundaries so long as at the end of it people accept that [if] the person they’re meting out a punishment to doesn’t accept it as fair, they’re going to react and their reaction will cause a consequence.’’
Furthermore, Sheppard reckons personalising issues is unavoidable. It takes a person doing something to create an issue which means criticism is always personal.
Sheppard reckons the kerfuffle made over the $30m mansion Hotchin was building on Auckland’s plush Paritai Dr while Hanover investors’ money was frozen and they were being asked to vote through a complicated debt-for-equity swap with Allied Farmers, was perfectly acceptable, because of the perception the house was being paid for with other people’s money.
But Brian Gaynor, Milford Asset Management executive director and long-time investment commentator, disagrees.
He reckons it’s best to stick to the issues and not get personal, and that all the media hoopla over Hotchin’s house was misplaced.
‘‘It is quite easy, and I know that it sells newspapers and stuff, to really have a go at the house and the size of it and how much money he spent,’’ Gaynor says.
‘‘[But] I prefer just to stick to the issues.’’
And nor would he, for example, advocate people boycott buying Bendon underwear because the lingerie maker is owned by Watson and they’re angered by events at Hanover.
‘‘The big loser in that is probably going to be the employees of Bendon. I would prefer to hit these guys directly in the pocket themselves rather than going in a circular route,’’ Gaynor says.
Fisher Funds Management founder and managing director Carmel Fisher says her firm has rarely found itself in a position where public disagreements with boards are necessary. In a position common among fund managers, Fisher says, generally, when dissatisfied with the performance or a decision of a company, her staff will express their concerns to the management and board in private, which frequently leads to useful dialogue.
The most notable occasion when this strategy failed was during Waste Management’s $870m takeover by Australia’s Transpacific Industries in 2006. Fisher Funds and other major shareholders took issue with the deal because it was structured as an amalgamation under the Companies Act, rather than as a takeover offer under the Takeovers Code. This meant Transpacific only required 75% rather than 90% shareholder support at a special shareholder meeting to secure 100% of Waste Management’s shares.