CPO AGM Fri 20th Jan 2012 - a personal view of the meeting

This is a ‘quick and dirty’ write up of a few salient facts (plus some personal opinions) of today’s CPO AGM. It is based on some notes I took plus my reference to my ‘live tweeting’ which thankfully was not curtailed this time. I would stress these are personal observations and interpretations, but where possible/appropriate I did try to check salient points with those who understand such matters better than I. They are not notes of the meeting, but notes from the meeting (there is a difference) as they do not pretend to be comprehensive. If there are any errors I apologise.

I hope those at the meeting will bear with me if there appear to be gaps. I find tweeting, listening and thinking all at the same time difficult on occasions.

Results of Motions

Here, fundamentally, are the results of the 11 motions submitted to the meeting.

Motion 1 (Accounts approval) For 3723 Against 279 Passed

Motion 2 (Re-elect Steve Frankham) For 3247 Against 869 Passed

Motion 3 (Re-elect Gray Smith For 3363 Against 635 Passed

Motion 4 (Re-elect Dennis Wise) For 3264 Against 856 Passed

Motion 5 (Re-elect Rick Glanvill) For 3140 Against 983 Passed

Motion 6 (Re-elect Bob Sewell) For 3106 Against 1015 Passed

Motion 7 (Re-appoint auditors) For 3101 Against 920 Passed

Motion 8 (re auditors remuneration) For 3156 Against 857 Passed

Motion 9 (allotment of shares) For 2835 Against 1279 Passed

Motion 10 (share issue special resol.) For 2802 Against 1220 Rejected (needed 75%)

Motion 11 (Increase in directors to 7) For 2102 Against 1930 Rejected (needed 75%)

There is no real surprise in the above except, arguably, the failure of motions 10 and 11.

The failure of Motion 10 to be passed means that shares cannot be put on sale to new shareholders until an EGM (see below). It is my clear understanding (and the understanding of others, including three journalists present) that no shares will be put on sale to anyone until after the AGM anyway, as this was a verbal assurance given by a number of directors to the meeting. This assurance is a major achievement in my view, as it gives time for proper review and analysis to take place.

The failure of Motion 11 was a bit of a surprise to me, and it may be (pure conjecture) that some of the proxy votes used to re-elect the directors did not support this motion. My personal view is that an increase to seven directors would allow a wider range of views to be heard, but the AGM has spoken so the issue is presumably dead – it was not exactly heavily debated today so does not look like a hot issue for many.

Those are the bare bones of the results. Of possibly greater interest were the questions and responses. My live twitter feed, on re-reading it, had a couple of gaps but in the absence of formal notes will have to do as an aide memoire.

The Meeting Itself

There were, I guess, c150-170 shareholders present, not up to EGM numbers but a lot more than the c30 in recent years. One point made to me as to why turnout may not have been higher – the AGM agendas were sent out in ERS envelopes and looked liked mail shots and some were probably thrown away. I would suggest they need to be shown as clearly coming from Chelsea (via ERS).

I thought Steve Frankham was at times uncomfortable chairing the meeting, especially when questions and comments got hostile, but that is not a big surprise as it must be a horrendous and thankless task to deal with a barrage of questions from all comers. I have seen the Chairman of a FTSE 100 company visibly struggle to deal with angry shareholders, so Steve is not alone.

I did feel there was less emotion today, partly because the motions were less emotive but also, possibly, because Bruce Buck and Ron Gourlay were not present so there was no opportunity to vent at the club itself.

In terms of speakers, many were known to me from the EGM campaign (including Dave Spring, Theresa McGee, Clint Steele, Trizia Fiorellino, Paul Todd, James Greenbury and Tom Broderick). I thought they all spoke eloquently, as did plenty of other speakers whose names I didn’t catch. Most questions were primarily directed at Steve Frankham (though he deferred on many to Gray Smith). Gray (a lawyer) responded to legal questions with a “we’re a new broom” type response.

A number of speakers tried to get Motions 9-11 taken off the agenda and submitted to an EGM, because of the disputed shares but this was ruled against by Steve Frankham and Gray Smith.

Key Issues Raised

Role of CPO

Speakers made made a valid point regarding a ‘CPO vision’ where the directors detail what they see as the role of the CPO going forward. Trizia Fiorellino referred to the desire for individual directors manifestos before elections. Both seem excellent ideas, and it is certainly to be hoped that Steve and the other directors come up with a joint vision of the future (e.g. are they fund raisers, facilitators, pressure group, active conscience of Stamford Bridge etc.?)

Liaison With Hammersmith & Fulham Council

Shareholder Tom Broderick had e-mailed H&F council and they confirmed that they are keen to explore all options regarding Stamford Bridge. A number of people suggested that CPO should have a public meeting with Hammersmith and Fulham Council. SF gave no commitment on this, but it is clear that many shareholders (including this one) would welcome such an initiative, though I suspect the club might potentially see this as unwelcome interference.

Value of Ground/Shares

James Greenbury spoke about future share sales, in terms of the value per share and the limit of numbers of shares. Adil Pastakia spoke about the potential value of the ground based on market price of land sold recently in the area, and what each share was potentially worth.

In my opinion it has to be strongly borne in mind, of course, that the CPO was categorically not set up to make money for shareholders but to protect the club, and I heard comments about the dangers of ‘carpetbaggers’ from a couple of people. There was a lack of clarity by SF as to what land CPO actually own (they also own the football club name, of course).

Share Sales

Concern about the c2,000 shares sold between 3/10/11 (EGM announced) and 20/10/11 (sales suspended) was expressed by a number of people (including Dave Spring, Paul Todd and Theresa McGee), specifically the c1600 shares sold above the agreed 2011 limit due to human error. Reference was made to Dan King’s articles in the Sun this week revealing multiple share purchasers and their alleged links to the club. Dan asked a question on the subject, as did a number of others. Steve Frankham’s response was to reiterate on a number of occasions that Gray Smith would look into the matter. Eventually, and fundamentally, the meeting was given a verbal assurance that no further shares would be sold until after the EGM when a report would be given.

Personally, I like the idea, voiced at the meeting, of CPO shares placed on sale again, with no limit as to annual or individual sales but a limit (for new shares issued) of a maximum of 10 votes regardless of shareholding. This would in effect create a Class ‘B’ share, with less rights than those of existing shareholders, but only if an individual holds more than ten shares. It would prevent help any potential; concert parties while at the same time maximising revenue.

As indicated above, it was eventually agreed verbally that no further share sales would be allowed until an EGM had taken place (see below), which I am sure was not what Steve Frankham wanted to do, so credit to him for judging the mood of the meeting and acting accordingly.

Future EGM

It was agreed that there will be an EGM in the (relatively) near future, possibly after Easter I guess. This will allow motions from non-directors to be submitted – it was accepted I think that the process of motion submission for this AGM was flawed and an EGM will allow shareholders a chance to address this. It also allows further investigation by Gray Smith into the 2011 share sales issue.

There is a danger, of course, that the EGM then gets flooded with motions, and it is to be hoped that some alliances can be formed to avoid multiple similar motions being posted.

Summary

The continued suspension of share sales is, I guess, a victory of sorts for SaynoCPO. The re-election of all five directors surprised nobody, though I must admit the failure to increase maximum number of directors from five to seven surprised me.

The quality of questions was, I thought, generally pretty high (though inevitably some rambled a bit, and there was an element of repetition) and I did feel some of the responses were a bit evasive, but I guess that depends on your viewpoint and I don’t claim to be unbiased myself.

The meeting was never going to be as emotive (or draining) as the EGM, though it still lasted well over three hours (including a long time counting votes cast). Dennis Wise reiterated that “We are all Chelsea” which is very true, but that’s about all that is unanimous amongst all parties. There has been a lot of animosity in recent weeks, some quite unpleasant and directed both at CPO directors and SaynoCPO supporters, and it is to be hoped that this can stop (I am possibly being naive here) and constructive thinking and dialogue can take place before the EGM.

Tim Rolls