Changing the RHG board

Well, Computershare won’t give me the proxies so I have absolutely no idea how we’ll go! I guess we’ll find out at 2pm this afternoon.

I’ll write more tonight but, for now, wish us luck.

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We’ve now mailed out our case to shareholders and the scene is set for our little boardroom showdown. Several shareholders have called us to say that they have not received their proxy form from the company. If you’re in a similar boat, or you’ve already cast your vote and wish to change it, then here is a step-by-step guide to what you need to do:

1.    You’ll need to call the registry, Computershare. But before doing so, please ensure you have the appropriate reference number to hand. This will be your HIN or SRN, which is typically located in the top right hand side of most personalised correspondence from the company.
2.    Call Computershare on 1300 850 505
3.    A computer will ask you to say the name of the company you’re enquiry relates to. Tell it ‘RHG’ and it should then confirm it.
4.    Press 2 for general shareholder enquiries.
5.    Press 0 for ‘other enquiries’.
6.    You should now be speaking with a human being who will ask for your HIN or SRN. Ask them to send you a new proxy form for the annual meeting.
7.    If you’ve already submitted a form and wish to change your vote, the registry will accept the most recently received proxy form.

Thank you for taking the time and effort to ensure your vote counts. We appreciate it.
Here is an image of the correspondence, in case your copy didn’t arrive.
RHG Letter Nov09

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By the time RHG’s loan book has been repaid to the point where it is no longer profitable – management have indicated this will be some time in 2011 – we expect the company will have approximately $1 per share in tangible assets. It could be less if the company loses money on the mortgage assets it’s bought or the credit guarantees it’s provided to the underlying lenders.

Conversely, it could be more if the cost of funding RHG’s mortgage book declines. Encouragingly, there are signs of life in the non-bank lending market; Members Equity Bank recently sold Residential Mortgage-Backed Securities without government support at a cost much lower than RHG’s existing cost of funding. But these factors might only make 10 cents difference either way and, the smaller the loan book gets, the less important they become.

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This simple four-step checklist will make sure your vote counts come 12 November:

1. Write the name Steven Johnson in the proxy box at the top of the page
2. Place a cross against either ‘for’, ‘against’ or ‘abstain’ for each of the four resolutions
3. Make sure you sign it
4. Send the proxy form to Computershare, not to us or the company

If you leave the voting at my discretion, they’ll still get voted, at the meeting, in favour of Greg and me and against David Coe. But, by ticking the boxes when you send your proxy in, you’ll be sending a message loud and clear to the existing board before the meeting takes place. It also means the tally will be included in the Chairman’s address and any public information released about the meeting.

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Hi everyone, this is Greg. Steve is preparing for his appearance in Wollongong tonight, so I thought I’d get the ball rolling now the current board has laid its cards on the table.

Proxy forms have been mailed to all RHG shareholders and it’s time to get your vote in. Below is an image of our recommendation of how to vote on the form the company has sent. If you wish to support us, please nominate Mr Steven Johnson as your proxy AND vote as indicated below (you can use the zoom option at the base of the image to get a clearer view).

As always, please feel free to ask any questions or make comments.
RHG how to vote

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RHG last night lodged its 2009 notice of annual meeting, proxy forms and the annual report on the ASX website. Not surprisingly, they won’t be recommending Greg or me and they will be supporting the re-election of David Coe.

There’s some interesting stuff in the notice of meeting about us and also about David Coe. It seems that being able to raise hundreds of millions of dollars from a gullible public is a measure of success, irrespective of what happens to those dollars after they’ve been handed over. [click to continue…]

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Here is the resume we sent across for Greg. We tried to highlight some of the areas we thought Greg could add to the existing board. I have to be honest, though, I didn’t expect them to send it out …

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We were asked to submit three documents to the RHG Board: a corporate governance disclosure indicating how we intend to deal with potential conflicts of interest; and CVs from Greg and I outlining what relevent experience we have applicable to the RHG board.

Three documents were sent across to RHG’s lawyer late last week and all three were rejected, before his client ‘has even had an opportunity to review’ them. ‘The documents go well beyond addressing the specific requirements of the ASX Corporate Governance Principles and Recommendations’, we were told, and ‘in places transgress over into electioneering – which, as you know, is not permissible under the Advance Bank case.’ I didn’t know. But now I do.

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An ASX announcement from RHG yesterday indicated CEO Glenn Goddard has converted the vested portion of his company issued options into ordinary shares. Goddard was issued 10 million options in July 2008, with a strike price of 10 cents each. So far, 6 million are able to be exercised and that’s exactly what he’s done, forking out $600,000 for a parcel of shares with a current market value of $3.8m (there are now 329m shares on issue, so Goddard owns 1.8% of the outstanding shares). Who knows, perhaps he’s planning on voting for Greg and myself at the upcomimg AGM?

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