Entrust requests special meeting of Vector shareholders

Loss of confidence after Entrust considers chairman acts against best interests of shareholders and beneficiaries.

Entrust, majority owner of Vector, has taken the unprecedented step of asking Vector to hold a special meeting of shareholders to remove outgoing chairman, Michael Stiassny.

Entrust passed a vote of no confidence in Michael Stiassny as chairman of Vector, due to his behaviour in recent months, following Trustees’ decision earlier this year to not support his re-election.

William Cairns Chairman of Entrust, says trustees made the difficult decision at a meeting last week.

“Since May, when Entrust decided not to support Mr Stiassny’s re-election, his behaviour has changed. Our relationship has irrevocably broken down and all trust is gone. We have lost confidence and it is now time to take action to remove him as chairman.”

Since May, Mr Stiassny has:

  • Publicly stated he is stepping down yet has taken steps which Entrust considers to be contrary to the best interests of Vector shareholders and Entrust beneficiaries.
  • Implemented a process to make it difficult for Entrust to communicate with Vector, resulting in a breakdown in the operating arrangements between Vector management and Entrust which have been in place for many years.  This has caused unacceptable risk and unnecessary disruption to Entrust.
  • Delayed setting the date of Vector’s annual shareholder meeting  at which his re-election would not be supported, without explanation or good reason, despite repeated requests to do so. Entrust is concerned that the date of the meeting has been delayed for reasons that are not in the best interests of Vector.
  • Moved the date of Vector’s annual shareholder meeting  from 27 September 2018 as confirmed to Entrust by Vector (similar timing to previous years and consistent with advice given to market) to 29 October 2018.  This is a month later than usual, a departure from Vector’s normal practice and after the trust elections.
  • Has spoken to media suggesting that Entrust intends to sell down its shares in Vector Limited with the effect that dividends to beneficiaries would be reduced. 

There is no basis in fact for this suggestion and Entrust is concerned that these comments were made by Mr Stiassny for the purpose of discrediting Trustees and furthering a personal agenda. These comments to media have upset and caused distress to the community that Entrust has served for the past 25 years.

“Our original decision to not support Mr Stiassny, after 16 years of service, was based on tenure, in accordance with the principles of good governance and made after seeking independent advice,” says Mr Cairns.

“Mr Stiassny’s directorship expires every three years by rotation. No public company chair is a chair for life. Mr Stiassny as an experienced businessman, company director and chairman, should know this.

“It is sad after 16 years, that his final months at the helm of Vector are taking this course. Even more disappointing is his behaviour, which is causing distress and upset to beneficiaries in the community that he both lives in and serves.

“His recent comments to media about Entrust dividends being at risk because of a possible sell down of Vector shares are scuttlebutt causing upset and distress.

“Let me be clear. Entrust’s shares in Vector are not for sale and we are committed to the ongoing payment of dividends to the community, based on Vector’s financial performance. End of story.”

Mr Stiassny has publicly stated he is stepping down, so the reasons for his actions are unclear, says Mr Cairns.

“We take issue with certain decisions made under Mr Stiassny’s chairmanship which we believe are not in Vector’s best interests, including the decision to delay the annual shareholder meeting previously scheduled for 27 September to Monday 29 October, after Trust elections.

“The delay appears to be related to the Trust election which suggests to us that Mr Stiassny may be hoping for a change of Trustees thereby leaving open the prospect of re-election as director.

“We hope that by sharing this information our stakeholders will understand the reasons for the no confidence motion and have a greater appreciation for the events of the past few days.”