Jardine group shareholders yesterday voted down proposals that would have left it vulnerable to a takeover by dissolving its defensive cross-shareholding. But the American investment firm that tabled the motions claimed victory after a clear majority of independents voted for the proposals.
The vote for the status quo, which allows the Keswick family to maintain control, came after Jardine directors endured two hours of intense questioning from San Diego-based Brandes Investment Partners during meetings in Bermuda, where the company is domiciled.
Directors of Jardine Matheson Holdings and Jardine Strategic Holdings voted unanimously against Brandes' six reforming resolutions, despite veiled threats from independent shareholders that they might sue the directors for breach of fiduciary duty.
Henry Keswick, chairman of both companies, said the result was 'very satisfactory' after being forced to defend the shareholding arrangement in front of shareholders. The system sees Jardine Matheson owning 61 per cent of Jardine Strategic, while Jardine Strategic owns 40.2 per cent of Jardine Matheson. A majority of directors sit on the boards of both companies, a fact that Brandes managing partner Brent Woods argued made them unaccountable and contributed to the poor performance of the shares.
The vote saw 72 per cent of Jardine Matheson shareholders and 74 per cent of Jardine Strategic shareholders cast their votes. In the case of group holding company Jardine Matheson, the proposals received an average 17.5 per cent support level from shareholders, through 125.7 million votes cast in their favour. After accounting for Jardine Strategic's stake in the company, directors' shares, a management remuneration trust, and known affiliated parties, a maximum 25 million shareholders voted against the resolutions.
'We take it as a clear victory that a majority of the independent shareholders voted for our proposals,' Mr Woods said. Jardine Matheson managing director Percy Weatherall said: 'We shall let the numbers speak for themselves. If Mr Woods is claiming victory I suppose I can make a similar claim.' Mr Keswick ruled out Jardines relisting in Hong Kong, but said he was comfortable with developments in the SAR since the handover. 'The transition has been seamless, the rule of law is standing up well, the Chief Executive is doing a very good job. I would say things are about as good as they possibly could be.' Regarding the mainland he said: 'I am a regular visitor there myself and our relationship, for a humble Scottish merchant, with the mainland leadership is constructive.' He refused to be drawn on the reasons for the departure early this year of Jardine Matheson's former managing director, Alasdair Morrison. It was claimed at the time that the departure followed a confrontation with Mr Keswick over Mr Morrison's proposal to scrap the cross-shareholding structure.