SHOULD ASX LICs / COMPANIES WIND UP AND DO THEY HAVE THE RIGHT “SKIN IN THE GAME”?

Should Australian Leaders Fund Limited (ASX:ALF), Contango Income Generator Ltd (ASX:CIE) & Thorn Group Ltd (ASX:TGA) wind up most of their operations and return cash to shareholders?

For full disclosure I own shares in (ASX:ALF) and (ASX:TGA) at the time of writing. I do NOT own shares in (ASX:CIE).

By the way these examples haven’t yet allowed shareholders to vote for a wind up. In some of these cases they have asked shareholders to vote on alternative solutions. I just mentioned wind up because it is becoming topical. Some shareholders have shown a desire for these 3 to return as much cash back to shareholders as possible.

Firstly any comments below are not to be interpreted as advice from me on how to vote on these company’s futures. I have no idea about reader’s individual circumstances.

The main reasons I decided to write this is

1) I encourage shareholders no matter how small to vote on key decisions. I have been lazy and complacent in the past about voting. I remember though one vote where although I got my vote in, there was only about $40k worth of shares that separated the outcome. Funnily enough that was the remuneration vote on one of the above 3. So you never know, the little guy might have a big say if you get your vote in.

2) When voting on such matters as whether a company should continue in its current form or perhaps even wind up I tend to look at key areas. I think it is worthwhile contemplating what sort of “skin in the game” exists.

Regarding point 2, I would be contemplating the following..

Reading key sections of the Annual Report such as..

Related Party Transactions

Remuneration Report

Director’s and KMP shareholdings (read in context with the above sections just mentioned).

I don’t have too much more to say on this topic. At the end of the day shareholders can choose how they wish to vote on such matters as they please. Although in closing, it seems like a complicated task these days to submit a valid request for a company to call a meeting. Requests at TGA & CIE recently were apparently invalid.

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