Andrew “Twiggy” Forrest may be the controlling shareholder in a $15 billion company, but he still runs emerging iron ore powerhouse Fortescue Metals likes some two bob speculative mining stock.
Forty five minutes before the appointed time of last Thursday’s AGM in Perth, the minions were only just starting to put up the signs and load the presentations. No wonder there wasn’t much preparation because Fortescue’s share registry provider Computershare were explicitly told not to come to hand out proxy forms, check shareholdings and run any polls.
They didn’t even register visitors, shareholders or media so anyone off the street could just walk in and TV cameras did indeed roam unchecked through the room during the meeting.
When it came to re-appointing accountants BDO as auditor, I raised the point that it was time Fortescue started acting like a top 30 company and got a “Big Four” firm involved.
How on earth can a huge company like Fortescue get away with paying a small firm less than $100,000 a year for the audit? Even worse, the newest independent director, Geoff Brayshaw, hails from the very same small accounting firm.
The proxy advisers and institutions weren’t impressed with this HIH-esque approach and voted 10 million shares against Brayshaw’s appointment but this $500 million statement was swamped by Twiggy and the two big hand-picked American shareholders who together own 60% of the company.
The unprofessionalism gets worse because Herb Elliott’s chairman’s address in the annual report even had a typo in the first paragraph. There were several other obvious blunders in a report which only arrived 20 days before the AGM, when the rules say 28 days is the minimum.
Fortescue and Twiggy personally are both facing prosecution from ASIC for over-cooking statements about Chinese contracts to the ASX. You’d think Twiggy would therefore be careful about Fortescue’s public utterances but instead he surprised exploration boss Eamon Parry by asking him to address the AGM.
Parry was dressed in jeans and a t-shirt and his spontaneous bit was that shareholders would receive a Christmas present of a 1 billion tonne resource announced from the Solomon tenements. Err, shouldn’t this have been announced to the market first?
A better board wouldn’t tolerate all this yet Fortescue’s directors include three executives, one financier, two major shareholders, one audit firm associate and the cross-directorship of Herb and Twiggy having sat together on the Athletics Australia board for a few years.
And now that Twiggy has a Fortescue shareholding worth $5.3 billion, surely it is time to flick his other mining playthings, Moly Mines and Poseidon Nickel.
Apart from all that, Fortescue is in great shape.
Listen to the Mayne Report audio of anti-pokies campaigner Gabi Byrne taking on James Packer about gambling at the Seek.com AGM in Melbourne last Thursday.