Cromwell Property Group (CMW) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. And welcome to the General Meeting of Cromwell Corporation Limited. My name is Paul Weightman. I'm the Managing Director and Chief Executive Officer of Cromwell Property Group. Cromwell was pleased to facilitate a meeting through the online platform provided by our registry, Link Market Services Limited. This enables securityholders to participate in the meeting irrespective of where they are in the world, and you certainly have participated. We're delighted to say that over 6,000 proxies were lodged before proxy close on Saturday, 28 March 2020. All of those proxies have been diligently counted and processed by Link Market Services in preparation for today's meeting. This record highest level of Cromwell securityholder participation is very pleasing. And the Cromwell Board, again, thank securityholders for their participation. I warmly welcome you all to today's meeting. As you'll be aware, the COVID-19 pandemic has resulted in unprecedented travel and social distancing restrictions. As a result of those restrictions, Cromwell Chair Leon Blitz is in London, and in order to facilitate the efficient operation of this meeting, I've been appointed as the Deputy Chair, as Leon can't address the meeting. Before I open the meeting, I'd like to recognize my fellow directors of Cromwell Corporation Limited. Chair, Leon Blitz, who's joining us from London at the very early hour of 12:30 a.m.; Andy Fay, who is joining us from Sydney; Tanya Cox, also joining us from Sydney; Lisa Scenna, also joining from the U.K. at the very early hour of 12:30 a.m.; and Jane Tongs, who is joining us today from Melbourne. Now I'd like to open the meeting. I've been informed that a quorum for the meeting is present, and I formally declare the meeting open. Cromwell Property Group is a stapled enterprise consisting of Cromwell Corporation Limited, which is referred to as the Company, and the Cromwell Diversified Property Trust, the responsible entity of which is Cromwell Property Securities Limited. Today's meeting is a general meeting of the company, and you'll see that there are some formalities to be followed. Those securityholders who have not previously lodged a proxy and those securityholders holding open proxies will have received an electronic voting card on registration. You can cast your vote using that card. If you're voting your own securities as well as the securities of one or more other securityholders as their proxy, you will have your electronic voting card as well as an electronic voting card for the proxy appointment. Those securityholders who have previously lodged a proxy and those proxyholders holding directed proxies will have received an electronic nonvoting card on registration. Shortly, securityholders will be asked to vote on the resolution to be put to the meeting. This ordinary resolution relates to the company only. As chair of the meeting, I've called for a poll for the resolution. And as a result, voting on the resolution will be conducted on a poll. Matt Foster from Link Market Services has been appointed as returning officer. A number of proxies have been received and in line with the requirements of the Corporations Act. Details of all proxies in respect of the resolution will be recorded in the minutes. Each Cromwell director who holds Cromwell Property Group Securities has voted against the resolution. You should note that as Chair of the meeting, I intend to vote undirected proxies against the resolution. Cromwell securityholders and proxyholders will have an opportunity to ask questions or comment on the resolution. You can do this by selecting the Ask a Question tab within the online platform. In the interest of fairness to all Cromwell securityholders attending this meeting, I ask that you limit your questions and comments to the resolution being considered. And I reserve the right as Chair of the meeting to rule questions as not pertaining to the meeting or as out of order. We welcome a number of visitors to today's meeting. And please note, as visitors, you cannot ask questions, make comments or vote. The Notice of Meeting was sent within the notice periods required by the Corporations Act and the constitution of the company, and I will take the notice as having been read. The resolution relates to the election of Dr. Gary Weiss, who has been nominated by a shareholder as a director of the company. Dr. Weiss has been nominated as a director of the company by ARA Real Estate Investors XXI Private Limited. There is commentary relating to the resolution in the notice of meeting, which I'll take as having been read. The resolution reads that: Pursuant to and in accordance with Clause 62.3 of the company's resolution, Dr. Gary Weiss being eligible and having consented to act, be elected as a director of Cromwell Corporation Limited, ABN44001056980 with immediate effect. The Cromwell Directors unanimously recommend that shareholders of Cromwell Corporation Limited vote against the resolution. Would any securityholders like to ask a question about or comment on the resolution?

The question is, Gary Weiss was given the opportunity to allocate another person to be a director of Cromwell in his place. Why was that offer rejected, thus resulting in this unnecessary and time-wasting situation distracting the company from its work? Further, Mr. Weiss and his foreign backers today are engaging in a contrived event designed to take advantage of existing shareholders, having lost the resolution at the AGM and manipulating the share price throughout the process. Your explanations, please. Can I say in response to that question, I don't think Mr. Weiss was offered the opportunity to appoint another person in his place. There was a discussion between the Chair of Cromwell and ARA in relation to the potential appointment of an independent director as its representative, who wasn't overboarded. I probably can't make any comments in relation to the point, in relation to wasting time or distracting the company from its work. And I'll just take the question as being limited to the issue of the appointment of a director in Mr. Weiss' place. I'll take the rest of that question as a comment. The question is, Good morning. My name is John Whittington, and I'm a volunteer company monitor for the Australian Shareholders' Association. Today, I hold proxies for over 975,000 Cromwell Property Securities. Not only that, we act in the interest of at least 13,000 Cromwell Property Retail shareholders who hold over 12% of Cromwell properties. We firstly thank the Board for making this meeting more accessible to retail shareholders. I'm not sure if there's a balance of the question there or is that coming? Mr. Chairman, will Dr. Weiss be able to speak to his election? We believe that all directors standing for election, whether Board endorsed or not, should speak to their election. John, thank you for your comment. I think as you'd appreciate, it has been a difficult exercise organizing this meeting in the face of the COVID-19 restrictions on assembly and with the limitations that we faced in relation to travel. It has been a difficult exercise to organize, but I'm very pleased that Link have been able to assist us to make the meeting as accessible as possible to all securityholders. There is no facility for Dr. Weiss to dial in to speak. There is an opportunity for him to go through the Ask a Question tab on the web page. I'm not sure if Dr. Weiss is available or can do that, but I might just pause there for a couple of minutes just to see if there is a potential for Dr. Weiss to contribute to the meeting in that way. [ Break ]

John, we've got to agree with your comment that it's always desirable to have a director being able to speak on his election. As you'd appreciate, with some of the technical limitations that we have had to accept with this meeting, I don't think that, that has been possible. We have tried to invite Gary to see if he could participate, but as you appreciate, the circumstances are less than what we would be able to expect in a normal meeting. So I will take that as a comment. I appreciate the comment. And I agree that it is always good to be able to have a director to speak before his election within the circumstances. This has proven to be difficult. And on part 2 of your question is that, otherwise, there is the potential for information to be gleaned, which could benefit the nominating company at the expense of other shareholders. So to get an idea of how significant this issue would be, Mr. Chairman, would you tell us what proportion of Board work would involve a decision where ARA was a party to or a competitor to a potential Cromwell transaction? So to answer that, John, I think if we go back to the period of time where we had an ARA nominee on the Board, it did become quite difficult to work through a conflict policy as to what had to be recused, what could be disclosed and how the application of the Cromwell conflict policy would operate. And I would expect that to be the case, again, in circumstances where we would have a nonindependent director on the board. The degree of work required will, of course, come down to the extent of the conflict and the extent of the issues that are involved. As we know, ARA is a competitor to Cromwell. It does operate in many of the markets in which Cromwell operates. And there is potential for directors to also have conflicts in relation to other investments, which they have, or other Boards on which they sit. So it's obviously preferable not to have that situation, because ultimately any distraction impacts on the ability of the Board to work effectively. The balance of the ASA question. My first question is about potential conflicts of interest. I think this is the preamble to the last question. We believe that if a director is a nominee of a company, then regardless of whether he or she is a director of or holds a financial interest in that company, than he or she cannot have -- sorry, that's flipped off. So that's been withdrawn. Has either the ARA or the Board -- I think those questions have been withdrawn. So there being no more questions or comments on the resolution. In accordance with Section 250L of the Corporations Act, I have called for voting on this resolution to be conducted on a poll. With the exception of those who have previously lodged a proxy and proxyholders holding directed proxies, please cast your vote for the resolution using the electronic voting card that you received when you validated your registration. Given that registration and voting opened 1 hour before the meeting started, the poll will remain open now for a further 2 minutes. The proxies are now displayed on the screen. [Voting]

All right. I think that's time up. So voting is now closed. I now declare the poll for the resolution closed. To allow for the counting of the poll, the meeting is now adjourned for just a few minutes, and the result will be declared upon conclusion of the counting of votes. Please listen for the announcement when the meeting will be reconvened. Whilst there's no requirement for you to remain until the meeting is reconvened, you're all, of course, welcome to do so. So we'll now just go to some music, while the meeting is adjourned. We'll come back and make an announcement. Thank you. [Break]

Ladies and gentlemen, could I have your attention, please? I'll now announce the results of the poll. I now reconvene the General Meeting of Cromwell Corporation Limited, and welcome back. I'll now read the results of the poll for the resolution, as conducted and advised by Link Market Services. The results for the poll for the resolution, the election of Dr. Gary Weiss as a director are as follows: For the resolution, 753,155,065 votes, representing 40.91% of the votes cast; against the resolution, 1,087,744,269 votes, representing 59.09% of the votes cast; abstentions on the resolution, 1,231,908 votes. Therefore, I declare that the resolution is lost. In the absence of any other business lawfully brought forward or otherwise required to be dealt with in this meeting, I formally declare the General Meeting of Cromwell Corporation Limited closed. Thank you for your attendance and your continuing support. I warmly wish each and everyone of you a happy, safe and healthy Easter. I look forward to seeing you all again in person or as soon as we, all of us together, have tackled the current coronavirus challenges. Good morning.