Go plc shareholders call for no-confidence vote in directors

Updated with notice of MEF director running for board election

Shareholders in GO plc have presented six resolutions to challenge the Dubai-owned telecoms provider to give explanations on company losses in Greek subsidiary Forthnet, and the controversial property valuations carried out in respect of land in Qawra and the eleven properties consisting of the telephone exchanges.

The shareholders are calling on the AGM to consider a "vote of no confidence" in the present board of directors and senior management executives.

The shareholders - who own at least 5% of the total issued share capital -  have called for a discussion on a GO directors' decision to skip dividend payment for 2011, and enact a revised dividend policy based on the annual cash surpluses of the company. They have also asked to consider including the necessary resolution to enable the company to adopt a share buy-back programme.

The call comes in the wake of the publication last March of GO's financial statements during which it registered an operating profit of €18.4 million in 2011, but reported an overall loss of €45.2 million as events taking place in Greece negatively impacted the value of GO's investment in Forthnet.

Forthnet's CEO, Panos Papadopoulos, was present at the presentation of GO's 2011 financial results and said the Greek company's turnover increased by 1.4% to €415.6 million yet the results were impacted by a €128.5 million goodwill impairment - a non-cash adjustment driven by an increase in the discount rates from 12.1% to 14.8%, due to the Greek macroeconomic environment.

GO Chairman, Deepak Padmanabhan said that in spite of a "challenging economic environment and increased competition" GO managed to keep its turnover stable, with only a marginal decrease from €132.3 million in 2010 to €131.6 million in 2011.

The report listing the GO plc's annual report for 2011 was published yesterday and distributed to all shareholders.

The report includes for the first time a total of six special resolutions following a request made by a number of shareholders in terms of the company announcement issued on 12 March, wherein it indicated that a shareholder or a group of shareholders owning not less than five per cent of the total issued share capital can request the company to place items on the agenda for discussion.

The six resolutions call on the board: to assess the investment in Forthnet indirectly held through Forgendo and any liabilities arising; to provide a detailed account of the developments leading up to the exchange of properties, including the valuations on the Qawra land and the eleven telephone exchanges; to consider that decisions related to future material transactions similar to those regarding the Qawra property and the investment in Greece, will be taken after due consultation with shareholders.

Other resolutions call on the board to seek approval of at least 75% of shareholders before any further investments in Forgendo or Forthnet or any such other foreign investment.

Joseph Agius, the chairman of the second largest shareholder in GO - the Maltacom Employees Foundation, which has 3 million shares - is running for the post of director again, after failing to be elected by a narrow margin in 2011.

"The current directors elected by the minority shareholders have done little or none to protect the investment, fruit of hard labour, that each an everyone of us has managed to save," Agius said in a letter to investors.

"Ever since the investment in Forthnet in January 2008, we had not heard of any objections from the incumbent elected directors; on the contrary some were actively involved throughout the whole process."

Agius said that since MEF lost a director on the board, GO had been hobbling "from one crisis to another leading to the current financial plight... assets contracted by a third, from €310 million at the end of 2009 to €215 million, eventually the dividends dwindled to this year's absolute zero."