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Replies to post #91990 on Sino Agro Food Inc (fka SIAF)
I think one thing will matter when it comes to the pps going forward is Solomon's supervoting shares. Those shares may prevent SIAF from achieving a normal rating on OSE. I suspect Solomon does not really comprehend that the shareholders in general are the owners of the company. He only owns a small part of the company himself.
Couldn´t agree more - we have to achieve a formal protection for minority shareholders otherwise we wont be able to attract institutional investors. They will not have the time to get to know Solomon to decide if they can trust him or not. Maybe they have a portfolion of 200 companies. That gives them about 10 minutes on average for every investment every month. If they going to make a investment decision all formalities has to be in place when they analyse the numbers.. I also think its hard to recruit qualified board members if they dont have real power when it comes to the important issues. Alibaba and other companies with majority owners have solved this through restrictions that creates minority protection for shareholders. There is no reason why we shouldn´t be able to do this. Through institutional investors we get PPS increase and through that we get the fundamentals in place for a great bond finance solution.
When the published dividend policy consists of some sensible observations I suspect the reason is that Solomon does not accept what would be most conducive to getting a highest possible pps. The problem in this context is that he has a different agenda from the rest of the shareholders and he is in a positition where it is up to him which choices are made. He knows that shareholders have been very useful to him by providing the money he needed to move the company forward. I think he wants shareholders to be rewarded for this, for instance by distributing a dividend of 8 % of net profits.
We dont know if his agenda really is contradicting our agenda and that really doesn´t matter if you just provide protection for minority shareholders in that way "everybody" can be formally safe from dillution. It doesn´t really matter if existing shareholders trust him. We need new strong owners that by definition dont have a trusting realtion with Solomon they need insurance....assurance....(you know what I mean)
It may be sensible to pay such a modest dividend if ROE is very high. But let us assume that ROE is only 10 % and there are still some investment opportunities Solomon would like to se realized. Would he be willing to pay for instance 50 % of net profits in cash dividends? I think he would not and that this would be far to generous toward shareholders. The reason could be that he does not understand that all the shareholders are the owners of the company. As long as Solomon controls SIAF the shares should trade at a discount I think since his agenda is not to maximize the profits of shareholders.
AI
