Proxy Voting

 

Krung Thai Asset Management Public Company Limited has laid down the directives related to the vote-casting, during the shareholder meeting, on behalf of and for the benefits of the mutual fund. In case of any conflict of interest, the company will take the action for the fund’s benefits.  In compliance with the code of laws, the company has set the following directives:
 
Guidelines to Vote-casting on Mutual Fund’s behalf at Shareholder Meeting
 
The company will cast vote at the shareholder meeting by considering factors that will have significant impacts on the benefits of the fund, including:
 
1. Financial position, performance, and dividend payout that may impact the benefits of shareholders or shareholder value.

2. The purchase or the sales of key assets, the trade or the lease of business, the merger or the acquisition of company, the contract management and the takeover.

3. The appointment and the removal of any member of the Board of Directors.

4. The change in the company’s financial restructure, such as the capital injection, the capital reduction, the refusal to sell newly-issued shares to existing shareholders, the debt-restructuring and the issuance of debentures.

5. Special remuneration for the company directors and the sales of securities to the company directors and employees

6. Any transaction that may be of any conflict of interest between the company and shareholders as well as those related to shareholders or other associated transactions.  The term “those related to shareholders” is referred to persons or partnerships as stipulated in Section 258 (1) to (7).

7. The change of the type of business or the company objectives.

8. The amendment of the company regulations.

9. The appointment and removal of the auditors of the company.
 
 
The consideration behind the vote-casting at the shareholder meeting, on behalf of the mutual fund
 
The consideration behind the vote-casting at the shareholder meeting, on behalf of the mutual fund, will be the responsibility of the investment committee of Krung Thai Asset Management, which will decide whether or not the vote will be cast.  If any agenda of the meeting requires further studies and analyses about positive and negative significant impacts on the fund, Krung Thai Asset Management will conduct such analytical studies on related points, to facilitate the vote-casting decision by the investment committee.

Even in case that the mutual fund, Krung Thai Asset Management or any related person becomes involved in the conflict of interest, the investment committee will, without restraint, cast the vote while strictly acting in accordance with the Guidelines on the Prevention of Conflict of Interest and  basing its vote-casting decision on the principles of Corporate Governance and the benefits of the fund.

However, if the investment committee does not have sufficient information to help it decide whether or not the vote will be cast at the shareholder meeting, the investment committee can abstain from voting for that particular meeting agenda.
 
 

In case of vote abstention


Krung Thai Asset Management will not cast any vote on the day of the shareholder meeting if the fund no longer invests in that particular company, or if the fund that Krung Thai Asset Management is managing does not give any authorization to cast the vote, on its behalf, at the shareholder meeting.

 
 

The assignment of representatives to vote at the shareholder meeting


Krung Thai Asset Management will assign its employees to cast vote under certain conditions, such as a shareholder meeting in the upcountry or when Krung Thai Asset Management has reviewed and found no meeting agenda that will have any significant impact on the benefits of the shareholders.  Krung Thai Asset Management may also authorize the independent director(s) of the listed company to cast the vote at the shareholder meeting in such a way that goes in line with the resolution of the investment committee, providing that the authorized committee members or individuals cannot change the purpose of the vote from the original intention of Krung Thai Asset Management’s investment committee.

In order for the authorization of the listed company’s independent director(s) to attend the shareholder meeting to be effective and flexible, the following circumstances are to be considered:

1. In case that Krung Thai Asset Management’ investment committee resolves to agree with the view of the Board of Directors of the listed company, as indicated in the Notice of the Shareholder Meeting, Krung Thai Asset Management can authorize the independent director(s) of the listed company to cast the vote on its behalf.

2. In case that Krung Thai Asset Management’s investment committee has a different view from that of the Board of Directors of the listed company, as indicated in the Notice of the Shareholder Meeting, the following actions can be implemented:


2.1 In case that the number of shares/equities is large, the employee(s) of Krung Thai Asset Management can be authorized to cast the vote at the shareholder meeting.
2.2 In case that the number of shares/equities is small and Krung Thai Asset Management’s investment committee meeting predicts a small chance of winning in the vote-casting, the committee can use its discretion to consider authorizing the listed company’s independent director(s) to cast the vote on its behalf.

So as to allow fund investors to access and learn about the vote-casting and the right to cast the vote Krung Thai Asset Management has performed and exercised on behalf of the fund, Krung Thai Asset Management has established the process to disclose the vote-casting guidelines at the shareholder meeting and the report of the vote-casting results to investors, as called for by the Securities and Exchange Commission (SEC), on Krung Thai Asset Management’s website. Krung Thai Asset Management will also store all documents related to the vote-casting at the shareholder meeting for at least 5 years, since the day the vote was cast, in order for the SEC or investors to inspect, when needed.

 

Criteria to cast vote as a shareholder
 
The casting of the vote can be done under following conditions:


1. Endorsement of the Financial Position and the Annual Performance Report, which may impact shareholders’ value.
Voting guidelines:  Acknowledge or vote “For” after Krung Thai Asset Management has found that there are no incorrect information or discrepancies in all financial statements, additional narrations and notes from the auditors as well as the listed company’s annual reports, and that all cross transactions between the listed company and its major shareholders as well as executives are accurate, correspond to the approvals given at the shareholder meeting and benefit the listed company.  Krung Thai Asset Management will also compare with the listed company’s financial position from the past year to determine how the company’s operations have been consistent with its strategies and in line with the economic conditions.  If any inconsistency is found after all information has been reviewed, Krung Thai Asset Management will cast an ‘Against’ vote.  If there is not sufficient information for consideration, Krung Thai Asset Management will abstain from voting.

2. Change of the Type of Business or the Objectives or the Structure of the Listed Company, which is crucial for the operations of the listed company.

Voting guidelines: Acknowledge or vote “For” after Krung Thai Asset Management has reviewed the listed company’s restructuring, which has an impact on its operations, and found that such an action will offer long-term benefits for the listed companies while all conditions and proposals are justified for shareholders.  If there should be any information that contradicts such a notion, Krung Thai Asset Management can cast an ‘Against’ vote.  And if there is not sufficient information for consideration, Krung Thai Asset Management will abstain from voting.

3. Appointment and the Removal of Company Directors

Voting guidelines: Acknowledge or vote “For” after Krung Thai Asset Management has reviewed the structure of the Board of Directors and resolved that all elements are appropriate and impartial, while presenting no prejudice that will allow any particular individuals to hold absolute decision-making power.  The ratio of independent directors within the Board of Directors must not be less than a third while the independent directors must not be executives or company officers or former company officers.  The Board of Directors should also be open for the participation of shareholders in formulating key company policies and determined to operate the business towards the utmost success of the listed company and its shareholders.  A director should be knowledgeable, possess understanding about the nature of the business of the listed company, have credibility and sufficient amount of time for the listed company, and be independent in carrying out all duties.  A director of a listed company should not be a member of the Board of Directors of other or rival companies as such a scenario could be in conflict of interest and hamper any decision making that will best benefit shareholders.  Moreover, Krung Thai Asset Management will review, in details, the qualifications of each director, such as work experience, educational background, and shareholding in listed companies, to make sure that he or she is suitable to be a director of the listed company.  In case of the reinstatement  of the director, his/her past performance in this same position must be reviewed to determine the level of satisfaction, which can be based on his/her meeting attendance and past proposals of creative ideas that could benefit shareholders and the company.  Unless all information is found to be in accordance with the aforementioned criteria, Krung Thai Asset Management will cast an “Against” vote. And if there is not sufficient information for consideration, Krung Thai Asset Management will abstain from voting.

 

Krung Thai Asset Management will vote “Against” if the company director(s) is(are) found to have been involved in or caused any of the following circumstances: 
 

1. The listed company’s earnings fall below the target established when the company was first set up.
2. The listed company becomes exposed to risks that affect the benefits of the shareholders, such as unfair voting rights, failed management of the assets that brings about a dilution effect on the company’s equity, or restriction on shareholders’ rights to call for a general shareholder meeting.
3. Evidence proves an intention to commit an offense, or conceal financial/accounting information, or the negligence of the resolution backed by the shareholders’ majority vote.
4. If the listed company’s chairperson or senior executive(s) is(are) found to have received remuneration, during the past 2 years, that is in the top-5 of the industry, while the listed company’s earnings have been in the bottom-5 of the industry.
5. The number of directors: An “Against” vote will be cast if the listed company adds or reduces the number of directors without seeking an approval from shareholders.
6. The listed company appoints independent director(s) while the number of directors attending the meeting is unreasonably small.
7. One or more directors was(were) the employee(s) of the listed company during the past 5 years, from the day appointed directorship, or was(were) involved in any consulting companies or affiliated with the advisor(s) that the company’s senior executives have worked with, or was(were) involved with any major clients or major service providers of the company.
8. One or more directors is(are) also simultaneously holding the same position at so many companies that he/she/they cannot allocate sufficient amount of time for the listed company.  Krung Thai Asset Management will weigh related director’s knowledge, capabilities and experiences while considering the directorship at the listed company’s subsidiary as the same position at the parent company.
9. One or more directors was(were) criminally convicted of financial, accounting or managerial fraud.
10. One or more directors is(are) operating a business that is a rival of the listed company (unless such information has been shared with the shareholder meeting prior to the appointment).
11. The director(s) or his/her related parties borrowed money from the listed company (except as welfare/benefits or in accordance with the Commercial Bank Act).

 
4.Special Compensation for the Listed Company’s Directors & Sale of Shares to the Listed Company’s Directors and Employees

Voting guidelines: Acknowledge or vote “For” after Krung Thai Asset Management has reviewed and agreed that the listed company’s operations and earnings have been good and reflected the satisfactory performances of each director and the entire board.  Krung Thai Asset Management will agree that such compensation should be offered to motivate the listed company’s directors to make the company continue to operate in such a way.  Krung Thai Asset Management will look the listed company’s performances to determine if the level of compensation to be offered will be similar to that offered by those in the same industry, or more, or less.  Moreover, Krung Thai Asset Management will consider an appropriate rate of remuneration that is based on such factors as the size of the company, its earnings growth rate, and the ratio of directors’ special compensation to the company’s performances.   It will also look at the non-monetary compensation payout plan, such as the stock option plan, the employee stock option plan (ESOP), the bonus for directors, or the stock right plan, to make sure that they are all at reasonable level.  In addition, the value of the stocks that will be given out should reflect the future value more than the present value and the execution of the stock option plan should refer to market prices, such as the current, 15-30 day average market price.  For ESOP, the impact of the dilution effect should not exceed 1% per year while the allocation of the stock for each of the company directors and employees should not exceed 5%.  But if certain directors or employees are found to be rather important for the company’s operations, the proportion of allocated stocks can be more than 5%.  If the review of all such information has found that some parts are not in accordance with the stated conditions, Krung Thai Asset Management will cast an “Against” vote. And if there is not sufficient information for consideration, Krung Thai Asset Management will abstain from voting.
 
5. Definition of the Responsibilities of Directors & Additional Compensation for Directors

Voting guidelines: Acknowledge or vote “For” after Krung Thai Asset Management has reviewed that the listed company’s proposal of additional compensation to the company director(s) or compensation for any legal expense has proven to be a result of the director’s best efforts to work for the benefits of the company, during a given period of time.  Krung Thai Asset Management will cast an “Against” vote if the listed company proposes to reduce or limit the responsibilities of the director(s) for any damage caused by his/her/their mistake in carrying out duties. And if there is not sufficient information for consideration, Krung Thai Asset Management will abstain from voting.

6. Acquisition and Disposition of Assets, Sell/Buy/Lease of Business, Merger and Acquisition, Takeover, and Business Transaction(s) wit Conflict of Interest between Shareholders and Their Related Parties/Persons
 
Voting guidelines: Acknowledge or vote “For” after Krung Thai Asset Management has reviewed if such transaction(s) will benefit the listed company and if all conditions are fair while prices and other details are clearly stated and proposed with reference to market prices or information from an independent appraiser or credible outsiders.  The execution of such transaction(s) should also be accompanied by an approved authentication, in case that ratification has also been made.  If such transaction(s) will only benefit certain related individuals and cause damage to the listed company, a cancellation is recommended while no ratification is also recommended for related Merger & Acquisition or Takeover.  Krung Thai Asset Management will prepare an analysis or refer to any analyses from securities companies by considering how such transaction(s) will benefit the listed company while reviewing the suitability and the fairness of all conditions on all shareholders’ behalf.  For any transaction(s) that may lead to the conflict of interest between shareholders and their related parties/persons, Krung Thai Asset Management will only look at the benefits of the listed company.  If Krung Thai Asset Management has found that such transaction(s) will benefit the listed company, it will cast a vote “For” it(them), otherwise, it will cast an “Against” vote.  For vote-casting in the shareholder meeting of the company, in which Krung Thai Asset Management has the conflict of interest with and KTB is the a major shareholder of 99%, Krung Thai Asset Management will use its discretion to cast a vote without any conflict of interest by considering the vote-casting as the same exercised at the shareholders meeting at other listed companies.  Krung Thai Asset Management will cast an “Against” vote if the listed company proposes to reduce or limit the responsibilities of the director(s) for any damage caused by the mistake in carrying out duties.  And if there is not sufficient information for consideration, Krung Thai Asset Management will abstain from voting.

7. Change in Capital Structure of Listed Company; such as a capital increase/decrease, a renunciation of capital-increase share sale to existing shareholders, a debt restructuring, the issuance of debentures, the issuance of convertible securities and the issuance of warrants.

Voting guidelines: Acknowledge or vote “For” after Krung Thai Asset Management has reviewed the reasons and the appropriateness of any change in the capital structure of the company, such as the reason for a capital increase and its benefits for the listed company and shareholders, the level of acceptable risk, and the agreeable impact on shareholding.  Moreover, Krung Thai Asset Management will consider how the allocation of capital-increase shares has been planned for all parties (existing shareholders and the general public; retail and institutional as well as local and international).  Each approach has a different dilution effect on shareholders and on the operations of the listed company (as some of the holders of the capital-increase shares may be the listed company’s directors; a scenario that will inevitably affect the company’s operations).  In addition, Krung Thai Asset Management will review the allocation of shares, available after the subscription by eligible investors, in order to ensure fairness for all parties while checking if the price offered will be in line with the regulations of the Securities and Exchange Commission (SEC) and of The Stock Exchange of Thailand (SET) (such as the survey on investors, the book building or the comparison of prices with the current market value.  If the offered price is over 20% lower than that traded in the market and the company refuses to make such an offer to existing shareholders, Krung Thai Asset Management will be particularly cautious about possible impacts on the stock price and the benefits of the listed companies.  If the impacts are tremendous and mean more harm than good to the listed company, Krung Thai Asset Management will cast an “Against” vote).  For a capital decrease, Krung Thai Asset Management will employ the same approach used in the case of a capital increase.  And for the issuance of warrants, Krung Thai Asset Management will review if such an issuance comes with clear objectives related to the fund utilization plan, the allocation is appropriate and the price is suitable.     

Issuance of Convertible Securities; Krung Thai Asset Management will consider the disclosure of features and details of:
The convertible securities, the conversion period, and the allocation of outstanding securities after the conversion in order to determine the impact of the stock prices and the proportion of shareholding when compared with the benefits that the listed company will receive.  If everything is good, Krung Thai Asset Management will agree with the issuance.  And if it sees otherwise, an “Against” vote will be cast.   But if Krung Thai Asset Management has reviewed all information related to the change in the listed company’s capital structure and found any inconsistency, it will cast an “Against” vote.  And if there is not sufficient information for consideration, Krung Thai Asset Management will abstain from voting.

8. Appointment and Removal of Auditors of Listed Company

Voting guidelines: Acknowledge or vote “For” after Krung Thai Asset Management has reviewed the list of auditors and the auditing company to verify their credibility, or cross-checked the list of the auditors with the official registration (CPA license), as required by the regulations of the Securities and Exchange Commission (SEC) or The Stock Exchange of Thailand (SET).  Krung Thai Asset Management will also compare the audit fee with that of the previous year to make sure the difference is not big.  If the fee is much higher than in the past year, a clear explanation, such as an increase in the amount of work, must be presented.  The listed company should also clearly explain how the auditors and the company are independent from each other, by stating that the auditors are not already the accounting advisors or the internal auditors of the listed company.  The listed company should also not be employing the same auditors for more than 5 consecutive years and should leave them out for at least 2 accounting years before resuming the service, except in case of listed state enterprises that can seek the service from the Office of the Auditor General of Thailand (OAG) every year.  In addition, if there is any change to the auditors, the listed company should clarify the reason behind the change.  If Krung Thai Asset Management has reviewed all information and found any inconsistency, it will cast an “Against” vote.  And if there is not sufficient information for consideration, Krung Thai Asset Management will abstain from voting.

9. Amendment of Memorandum of Association and Articles of Association of Listed Company

Voting guidelines: Acknowledge or vote “For” after Krung Thai Asset Management has reviewed and deemed that the amendment of the Memorandum of Association is for the purpose of correctness and to make it in line with the approval given at the shareholder meeting so that the listed company’s operations will improve and benefit shareholders.  If Krung Thai Asset Management has reviewed the amendment of Articles of Association and found that it has negatively affected the listed company and led to the loss of benefits of shareholders, it will cast an “Against” vote.  And if there is not sufficient information for consideration, Krung Thai Asset Management will abstain from voting.

10. Other Agenda

Voting guidelines:  Krung Thai Asset Management will abstain from voting, most of the time, because the listed company proposes no issue for approval or provides no information on an agenda that needs an approval, due to its views that such agenda will not be appropriate for a shareholder meeting.  The agenda of the shareholder meeting is legally required to be sent in written to shareholders at least 7 days prior to the day of the meeting.   If the listed company has an urgent agenda that needs to be added later, it may use its discretion to determine how significantly such an agenda will affect shareholders.  If such an agenda will benefit shareholders, Krung Thai Asset Management will acknowledge or vote “For”.  But if such an agenda will pose a negative impact on shareholders; for example, the appointment of directors, it will cast an “Against” vote.

Go To Tp