Small shareholders mobilise against 'scallywags'

By ELLEN READ markets writer

"Revolutions start when people get pushed into the dirt - then they rise like the phoenix."

That's how one small shareholder described yesterday's birth of the New Zealand Shareholders' Association.

More than 100, mostly greying, small shareholders banded together in a room at the Royal New Zealand Yacht Squadron in Auckland to form the association aimed at protecting their interests against the huge corporates in which they hold stakes.

"It won't be hard to get a story out of this - there's nothing but disgruntled shareholders in this room," said one person.

And he was right. "Scallywag," "thief" and "burglar" were among the kinder terms used to describe some of those involved in the country's listed companies.

The driving force behind the group is Auckland accountant and shareholder activist Bruce Sheppard, who was elected association chairman.

He will be joined on the board by four other officers.

Mr Sheppard said the association's vision was to promote the ethical governance of listed companies for the benefit of all shareholders.

When problems were identified, the company concerned would be notified and given the opportunity to address the situation before the association went public, he said.

"If we do actually nail one of them, the rest are going to be more careful, but that isn't an excuse to nail them for the hell of it."

Independent sharemarket analyst Brian Gaynor told the gathering that there was little doubt that New Zealand needed a shareholders' association.

"In fact, it's well overdue," he said, citing as evidence the New Zealand stockmarket's "dismal performance."

But although supportive of the association, he turned down a position on the board because of possible conflicts of interest.

Among other things, the association will analyse public company results and transactional issues, coordinate advocacy, provide a proxy service and promote shareholder initiatives. The membership subscription was set at $80.

Early this year, Mr Sheppard met representatives of the Australian Shareholders' Association, who agreed to provide material on the rules and the checklists they use for monitoring companies.

The Australian association provides information, runs regular meetings, arranges proxies and monitors company activities.

Formed in 1960, it now has more than 6000 individual members and 180 corporate members, mainly listed public companies.

Mr Sheppard said from indications of interest received so far, branches of the NZ association could soon be set up in Wellington, Christchurch and the Bay of Plenty.