The likes of AMP and Barclays are on the record expressing concerns about the Australian corporate voting system after voting their stock against certain resolutions and then seeing a smaller figure released for the total “against” vote.

The process involves six discrete steps and some of them are manual, so there is sure to be plenty of inaccuracy in the system.

The Rebel Sport vote last Thursday has created the precedent where only a full audit can satisfy the apparent inconsistencies. Perpetual has been in touch after Friday’s item and senior portfolio manager Matt Williams explains the company’s position as follows:

We did vote against the Rebel deal for all our holding less approximately 750,000 shares that we had purchased but had not settled prior to the cut-off for voting. That alone would not have caused the vote to get up.

Perpetual lifted its stake from 9.62 million shares to 10.68 million (up 0.93% to 8.67%) on 8 March but these hadn’t settled before the proxy deadline 48 hours before the vote. The fund manager could have fronted the meeting to vote them but chose not to.

It is worth crunching all the precise numbers from the voting results lodged with the ASX:

For: 51,449,874
Against: 15,636,324
Abstain: 13,260 (not 13 million as I reported on Thursday)
Didn’t vote: 14 million

The for and against are all that count and Archer Capital got over the line with 76.69% of the cast votes. However, we still haven’t solved the mystery of which of the three musketeers failed to follow through on their media pronouncements.

Paradice Investments is on the record claiming it voted its 6.17 million shares against the deal. When combined with Perpetual’s valid 9.62 million votes, that comes to 15.79 million shares – more than the total against vote of 15.636 million.

Tellingly, Invesco was refusing to comment about its 5.2 million shares on Thursday afternoon but the figures still don’t tally up if you believe this line from The Age’s Rod Myer:

Another smaller institutional investor with 3.2 million shares was also believed to have opposed it.

These extra 3.2 million shares seem to have disappeared. If the institutions had any guts, they would present at the NSW Supreme Court this week when formal court approval for the scheme of arrangement is sought.

There are clearly missing votes and only a full independent audit can get to the bottom of what happened.

Sadly, ASIC deputy chairman Jeremy Cooper had no idea about the Rebel Sport vote when quizzed at the ISS corporate governance conference on Friday. He couldn’t even answer the question about why it was a scheme of arrangement in the first place when Archer was simply making a straightforward takeover bid that should have required 90% approval.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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