Open Letter to the Shareholders of Komax Holding AG
Zug, 16 April 2015
Strengthen the shareholder democracy and support the removal of the 5% voting rights and registration restriction. Your vote counts!
Dear fellow shareholders,
As a shareholder (1.7% of outstanding shares) of Komax Holding AG, zCapital AG has set an agenda item for the Annual General Meeting on May 8, 2015. We are requesting the abolition of the 5% voting rights and registration restrictions. These restrictions represent a limitation on voting rights, the most significant shareholder right. The requested abolition should help to strengthen the position of shareholders as owners of the company and to win new shareholders for Komax. This should have a positive impact on the share price.
We are asking for your support: enter your shares in the share register before the deadline for exercising voting rights (May 6, 2015) and vote!
The voting rights restriction harms shareholders
We are a long-term investor and have been a Komax shareholder for years. We are convinced of the quality of the company and its employees.
The corporate governance of the company, however, is not at the same level of quality. The Board of Directors can limit the registration of shares and voting rights of shareholders at 5%. This unilateral instrument effectively serves as a barrier to entry: it "protects" the Board of Directors to the detriment of shareholders. Of a particular concern is the discretionary "can" wording in the articles of association. This gives the Board the right to arbitrary grant preferred shareholders an exception to the 5% rule.
Counterarguments of the Board are not valid
In its response to our request, the Board argues that the restriction on voting and registration ensures "that anyone who wishes to control the company is obliged to submit an offer to all shareholders." However, this protection is not provided by the voting and registration restrictions, but rather by the mandatory tender offer requirements under the Swiss Stock Exchange Act. Swiss law requires that anyone who exceeds the threshold of 33 1/3% of voting rights of a listed company, has to submit an offer to all shareholders.
The Board further argues that the restrictions on registration and voting are in the interest of a "diversified and balanced shareholder base." The truth, however, is that many potential shareholders, investment and pension funds nowadays avoid companies that continue to curtail the rights of shareholders. Only with the abolition of these restrictions would Komax give the capital market a clear signal that new shareholders are welcome and that their rights are 100% respected. This would help to make a lasting positive impact on the share price. A high share price is actually the best protection against a takeover.
Vote - in your own interest!
Dear fellow shareholders, it is time for Komax to implement a fair shareholder democracy in accordance with the principle "one share, one vote". Make your voice heard under Agenda Item 6 in your own interest as well as that of the company, and support our proposal to abolish the registration and voting rights restriction.
CEO Hilmar Langesand is available to answer any of your questions at +41 41 729 80 80 or info@zcapital.ch.
zCapital AG
Hilmar Langensand, CEO Reto Portmann, COO
About zCapital
zCapital AG based in Zug is an independent asset manager regulated by the Swiss Financial Market Supervisory Authority (FINMA). zCapital specializes in Swiss equities and manages assets of some CHF 700 million, including two investment funds (zCapital Swiss Small & Mid Cap Fund, zCapital Swiss Dividend Fund). Komax Holding AG shares are held through the zCapital Swiss Small & Mid Cap Fund. zCapital consistently has itself entered in the share register, does not engage in securities lending and exercises voting rights. www.zcapital.ch
