MOSCOW, Dec. 9, 2013 /PRNewswire/ -- The Investor Protection Association (IPA), the Russian shareholders' rights watchdog, issued an alert regarding the results of the recent board elections at Sibirsky Tsement (Siberian Cement), where minority shareholders have been denied even a single seat on the company's Board of Directors, even though they held enough votes to win two seats on the five-member Board, Russian Business Newswire reports.
The IPA has reported finding abuses in the process of compiling the voting lists. It is a common practice for minority shareholders, including institutional investors, to issue instructions to their proxies to vote for candidates under specific numbers on the ballot. The stock issuer company should provide this numbered list of candidates to all shareholders in advance. According to IPA, the company made changes to the ballot list, changing the order of candidates on the voting ballot compared to the lists provided to shareholders earlier.
The IPA is convinced that changing the ballot list resulted in the candidate reshuffling and proxies representing minority shareholders at the AGM gave their votes for the wrong candidates instead of those whom minority shareholders actually intended to support.
The IPA also points to the composition of the vote counting commission among other factors that may have affected the voting results: the commission included attorneys employed by FPS Sibkonkord, a company directly controlled by O.V. Sharykin, the majority shareholder in Sibirsky Tsement.
The Investor Protection Association has appealed to Siberian Cement shareholders to hold an extraordinary general meeting to re-elect the Board of Directors and engage an independent observer from each BoD candidate to monitor the procedures of the meeting.
According to the Investor Protection Association, this is but yet another chapter in the history of minority shareholder rights abuse in Russia. Similar techniques have been commonly used to ensure control over companies for the past 20 years.
SOURCE Russian Business News Network