The atmosphere at most annual general meetings this year were tense as shareholders were frustrated with their firm’s low dividend rates.
|Shareholders put their vote into a voting box at an annual general meeting in HCMC. Many shareholders were frustrated with their firm’s low dividend rates this year (Photo:Minh Tri)|
At the annual general meeting (AGM) last week, Hanoi-based financial investment company IDJ, which is listing on the Hanoi Stock Exchange, announced it set the ratio of profit on chattered capital at 10 percent only, equal to a net profit of VND32.6 billion (US$1.6 million).
The firm’s board of directors blamed the difficult times this year.
However, many shareholders disagreed with the way the board of director managed the net profit.
Despite the negative revenue and profit in 2010, the remaining amount of money after dividend, which reached more than VND21.6 billion ($1.1 million), remains too much, they said at the meeting.
They were also discontent with the dividend rate of 4 percent, asking to double the rate. IDJ general director Tran Trong Hieu said the high dividend rate would leave the company lacking capital for reinvestments.
Hieu said the firm struggled to mobilize capital as banks’ lending rates are very high due to the government’s tight monetary policy.
However, the board of directors eventually had to raise the net-profit target to 15 percent in 2011, equal to VND48.9 billion ($2.5 million), and the dividend rate to 6 percent due to many shareholders’ heated arguments.
Sacom Development And Investment Corporation, which lists on the Ho Chi Minh Stock Exchange with code name of SAM, had to turn the AGM this year into a meeting between shareholders and the firm’s board of directors due to a shortage of eligible shareholders.
However, the atmosphere at the meeting was heated up by strong arguments over the delay of bonus share issue with the 1:1 ratio, which was approved at the AGM last year.
General director Do Van Trac said the firm has not issue bonus shares since it failed to sell more than one million buyback shares. Nevertheless, many shareholders was discontent with the explanation, asking the board to either sell those amount of shares to shareholders for VND10,000 per share or turn them into bonus shares.
Kim Long Securities Corporation, listing on the Ho Chi Minh Stock Exchange coded KLS, coped with a similar issue as only 33 percent of eligible shareholders attended the AGM this year.
At the meeting between the board of directors and shareholders last week, many shareholders said they did not agree with the firm’s plan on switching the core businesses.
Earlier, chairman Ha Hoai Nam of the Hanoi-based brokerage said the firm would likely to switch from providing stock brokerage services to offering property consultancy and ecommerce services.
Some shareholders even accused the board of intentionally delay the AGM in an attempt to seek an easy approval for the plan as the number of individual shareholders was limited in the next AGMs.