HSBC

HSBC

HSBC gave shareholders what might be politely called "the runaround" in our efforts to collectively pool our shareholdings for the purposes of voting at the EGM. Many shareholders held shares in Nominee Accounts, where the bank holds the share certificates in a nominated account. 48 of our members held such accounts with HSBC and First Direct. However, despite all other banks and brokers complying with members requests for their voting rights to be used correctly, HSBC did not respond to ONE of our members, meaning that almost 160 million shares were withheld from our members for voting (This is a very important number!)

It is also normal for a nominee to pass on communications to shareholders from the company, and in the event that we had called an EGM, HSBC and First Direct were obliged to send us the details of the EGM, which they duly did. However, not in line with any other bank, they decided to offer some advice on how to vote at the EGM.

"The Company has announced that it has received requests regarding delisting from shareholders representing in excess of five percent of Hibu's issued share capital. However, it strongly believes that the proposed resolutions at the EGM are not in the best interests of the Group's stakeholders. The Board therefore unanimously recommends that shareholders vote against all of the proposed resolutions at the EGM"

The first point to note is that the first statement is completely false and misleading. This group and those that called the EGM had NEVER enquired about delisting. Secondly, this paragraph was one of only three in a single page letter, so it seems odd that they have extracted that paragraph alone from the eleven others contained in the Notice of EGM issued by the company, why not just send the whole Notice of EGM rather than choosing to extract one paragraph? The thing is, HSBC had some serious interests in Hibu PLC, firstly, it was one of the lenders, and secondly, it was Facility Agent and Security Agent for the Group, and had been since 2009. Therefore, HSBC had some very good reasons not to allow members of our Group onto the hibu board and potentially scupper the removal of shareholders.

Bear in mind that at the time of the EGM, there were no institutional holders of the stock, therefore there were only private retail investors. As a group we were confident that holding some 25% of the available voting rights that we would have all the resolutions passed, and of course, we were confident that no shareholders outside our group would actually vote to have the entire value of their shareholdings cancelled. We duly won by a majority on every resolution at the EGM.

HOWEVER.......

We were surprised that against every resolution there was the same amount of votes against each resolution, the quantity of shares attached to these votes was just under 160 million shares. In fact it was within 0.2% of the total amount of shares that our 48 members held that could not get access to voting rights through their HSBC nominee accounts. So, given that no sane investor would vote to have their investment wiped out, it can only be assumed that HSBC went in direct contravention of their customers wishes and used their shares to vote in opposition to the resolutions. The Group  CEO of HSBC at the time of the facilities agreement was Stephen Green, who, coincidentally has strong connections with Bob Wigley even to this day. HSBC had a strong financial interest not to let the shareholders onto the Board, and yet again, Wigley used his connections to ensure that due process was not followed to the disadvantage of shareholders.