Woolworths’ AGM will be an interesting one. Items of Business: 1. The Board will have to justify why they should keep their positions; 2. Will the Remuneration Report be adopted? And 3. The level of shareholder voting - will Australia's largest superannuation fund managers actively and actually vote at the AGM? The biggest road block for major funds in voting at the WOW AGM, is the level of WOW stock lending that has been undertaken in recent months. Today WOW has about 9.5% of its voting shares sold short and a fair slab of these shares have probably been lent by both the Industry Funds and other large funds with a fiduciary relationship with their clients. If the largest Australian Superannuation Funds are going to vote all of their shares at the WOW AGM (given that most of them adopt best practice corporate governance principles) then why is WOW stock not being covered and covered quickly? Surely they cannot vote shares they have lent? Or can they? (VIEW LINK)



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Kym Sheehan

In answer to the question can they vote the shares they've lent: generally no they cannot vote because they do not own the shares once 'lent'. 'Lending' is a misnomer because ownership or title of the shares is transferred. While the Australian Master Securities Lending Agreement does include a clause for the borrower to use 'best endeavours' to ensure the voting rights attached to borrowed securities are exercised in accordance with the lender's instructions, evidence from ASIC from 2009 (CP107, page 10) indicates this clause is frequently deleted. If your interested in the legal ins and outs of short selling this paper from The Centre for International Finance and Regulation from 2014 http://www.cifr.edu.au/assets/document/WP022-2014%20Ali%20E019%20The%20Legal%20Structure.pdf may be of interest. There are rights specified in the typical lending agreement in relation to calling back shares and the time frames involved. Proxy votes close 48 hours before the AGM and most institutional votes are lodged with 1-2 days of the deadline. Given 26 November AGM and 24 November proxy close-off, they still have time to recall for voting....