…Evagorou and Georgiou shine
Demetra Investments Pcl (DEM) announced that the Extraordinary General Meeting held on November 8, 2006 approved the special resolutions for a reduction in the nominal value of the shares, which paves the way for the payment of dividends from future profit.
DEM Chairman and AKEL MP Stavros Evagorou and Board member Vangelis Georgiou gave a superb performance in the way they handled about 20-30 hostile shareholders who were keen to disrupt the EGM, but in the end decided to back Management after all their “questions” were answered.
Most of the questions may be attributed to lack of knowledge of stock market and Company’s Law matters, but some were totally out of context, as in a number of cases tempers got out of hand and in some cases shareholders resorted to shouting “don’t tell us lies, and you are cheating on us”.
Fortunately, things did not get out of control and order was restored because of the ability of Georgiou to take questions, allow shareholders ample time to repeat and put all their questions and in the end pass the resolutions.
All for dividend
Georgiou had to explain the difference between nominal value, the net asset value and the traded price of Demetra shares, clarifying that the proposed change in the nominal value would not affect the situation.
Tempers erupted when it was mentioned that the company having lost CYP 100 mln of its capital had to write it off from its capital in order to be in a position to start giving dividends to shareholders from current and future profits.
“Otherwise, if we remain like this, then we need to recover the CYP 100 mln in lost capital before shareholders can start receiving dividend,” Georgiou told shareholders.
He also had to teach them that there was no issue of giving a bonus, as some were demanding, or issuing new shares, as some thought the increase in authorised capital would pertain.
Whose fault it is
Shareholders were up in arms over the responsibilities of the previous Board and management that allowed for up to CYP 100 mln, or half of the capital of CYP 200 mln to be lost.
Georgiou told shareholders that there were three main reasons why half of the capital was lost. First, it was because of the decline in share prices, which also hurt other stocks and shares. The second reason was due to the “Prodromou bill” (tabled by then DISY MP Prodromos Prodromou) and passed by the House which obliged investment companies to invest 80% of their assets in stocks.
“We practically begged the government (Minister of Finance) to allow us to invest 100% of our cash in government bonds, but they rejected us and told us that if we deviated, board members would be prosecuted,” said Georgiou.
The third reason was due to mismanagement and dubious investments in private companies that after having been investigated, are in courts.
“We are slowly recovering and will fight for money lost through suspicious deals,” said Georgiou, adding that Demetra has also sued the Republic for damages because of the passage of the Prodromou law, which was declared as unconstitutional because of the Demetra case. Demetra is preparing a lawsuit against all those responsible.
Approvals
The EGM approved a reduction in the Company’s issued share capital from CYP 200 mln to CYP 100 mln by decreasing the nominal value per share from CYP 1 to CYP 0.50 and a share buyback scheme.
The Company’s Net Asset Value as at 30 September 2006 was recorded at EUR 1.07 cent per share. Based on the latest closing price of the stock the Company trades at a 19.6% discount to its NAV.
Out of the more than 160.000 shareholders of Demetra, only 60 were present at the EGM representing 13.5% of the voting rights or 27.67 mln shares either directly or through proxies. The resolutions were passed by 99.8% of those present.
