Shareholder asks questions about Lai Sun emoluments

I RECEIVED the shareholders' circular from the directors of Lai Sun Development Co white-washing the more than generous emoluments paid to themselves.

As their shareholder, I wish you would allow me some space in your column to openly ask them a few questions: 1. You said 1994 was such a record year that a better reward, as much as a 148 per cent increase over the previous year (from $19.2 million to 47.6 million), was appropriate for the directors, but why was the dividend to shareholders only increased by a meagre 13.33 per cent (from 7.5 cents to 8.5 cents) over the same period? Is it appropriate and fair to the shareholders? 2. Since most of you are also substantial shareholders, are you not already benefiting from the good company result? Why do you think you should take so much extra cash out from the company as your additional benefits? 3. You boasted that profit attributable to shareholders had increased from $307 million in 1988 to $956 million in 1994 (2.12 times), but why did you not at the same time give the relative figures that the number of shares also increased from 798.5 million to 4.1355 billion (4.18 times) through all kinds of issues? By simple arithmetic, earning per share has actually declined, thanks to the exceptional hard work of the directors.

4. If you think the company has been so well run, why has the share price performed so poorly and lagged behind the Hang Seng Index over the years? Do you not think it has something to do with the company image created by the people who run the business? I hope my questions will not only be answered by the Lai Sun directors, but also looked at by the regulatory bodies.

As Hong Kong continues to become a major world stock market, we should have more clear guidelines as to the amount of payouts that can be made in any form to directors in relation to profits, as well as shareholders dividends, so that minority interests will not be sacrificed too much.

BENSON NG