Friday, May 26, 2006

BAT 2006 AGM

Report by Mwananchi of the British American Tobacco AGM took place at the Intercontinental Hotel in Nairobi in late April.

- They offered FREE parking for those who attended the AGM which was great!
- The AGM commenced on time but the Chairman read his "Chairman's Report" which should have been taken as read!
- There was a short film on BAT's new logo as well as what they are up to. Partly it seemed great PR considering the regulatory problems they are facing BUT a nice touch!
- The press was there in full force!
- The meeting was handled well & not rushed.
- The registration line was handled speedily & all shareholders got a "chit" that allowed them one bag of freebies with lunch & soda at the conclusion of the AGM. Quite a sight in a 5-star hotel as shareholders spread out with their lunch boxes out on the lawns & corridors of the hotel.

Freebies: Polo shirt & Cap (Pall Mall) with a duffel bag.

- Frustration at BARS but the queries were handled well by GeorgeM of BARS. BARS handled the registration as well.
- An excellent suggestion by a shareholder to hold the AGM at the factory similar to Sameer (who pitched a tent in their lawn/garden) to save on costs as well as provide the chance to tour the factory. The chairman responded that the AGM was an affordable indulgence once a year. The MD did agree to allow shareholders to tour "their" factory.
- I don't brook idiotic questions & this was from a guy I see at most AGMs I go to & he is a smart guy & should have known better! He asked why shut down Uganda when electricity is cheaper there plus loss of jobs. The matter was addressed in the Annual Report (do people read it?) but the MD indulged him & explained that the Nairobi factory is 10 times larger thus marginal costs are much lower. In addition, Uganda is facing severe electricity rationing thus moving to Kenya was fortuitous.
- Why don't Kenyan shareholders have a larger stake? As answered that coz BAT does not want to sell its shares.
- Bonus/Split. The FD (Lopokoiyit) said it did not benefit BAT & they have been under pressure from various parties (aka brokers) to do so. Listed firms whose shares trade often pay more in fees (A STUPID RULE THAT ONLY BENEFITS CMA, NSE & BROKERS NOT THE LISTED FIRMS - VituVingiSana).
- BAT will continue paying high dividends in lieu of bonuses but the Board will consult on the matter. They shot it down in the last Board Meeting
- Regulatory concerns were brought up by shareholders. BAT is working on trying to ensure a "fair" bill is passed by lobbying the powers that be. As a side note (my observation) that includes junkets for MPs to luxury hotels at the Coast!
- The usual suspects were there trying to get themselves on tape/TV...

An alternate view of the company in light of recent legislation restricting smoking in Kenya.

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