Sunday, August 05, 2012

Money for nothing and waste for the landfill

Many years ago in 1986 I bought one board lot of shares in the Cafe de Coral fast food restaurant chain when the company had its IPO.  A few years later I sold the shares, but the company still  kept sending me dividend cheques and reports.  I wrote to the share registrar telling them I'd sold the shares, but they replied that the new owner had not registered them and therefore so far as they were concerned I was still the registered owner.  I have no idea why someone would buy shares and not bother to register them or collect the dividends, but the result is that for 20-odd years I have been receiving dividends on shares I no longer own.

Over those years, the company has done well (unlike other shares I have owned - one company went bust; another's shares are so worthless they would cost me more in broker's fees to sell than the amount I could sell them for) - well enough that I wish I'd bought more shares in the first place - 25 years of increased turnover, and continuous profit growth until Hong Kong's minimum wage law finally dented this record.

However, the downside of still receiving the dividends is that I still receive the company's reports.  These have grown with the business - having once been magazine-sized, the latest is 320 pages long and the thickness of a telephone directory, half in English and half in Chinese.  How many of these pages do I read?  Just one - the highlights, to see how the company is doing and what dividend it will pay.

I strongly suspect that many small shareholders only glance at the highlights, which means that most of these pages are totally wasted.  Ironically, the cover of Cafe de Coral's latest annual report depicts a grove of fruit trees - ironic because at least that many trees were probably cut down to print it.  And while my copy goes straight to the recuycle bin, not all shareholders are so environmentally consciopus and a fair percentage of copies probably end up in landfills.

What can be done about this enormous waste of resources, with its negative impact on the environment?  Hong Kong Stock Exchange rules permit a company to print its report in English only, with a separate Chinese translation available to shareholders on request, but so far as I know, few companies take advantage of this.  But even that is not enough - why can't companies do as the London Exchange allows its listed companies to do: send out a brief highlights document only and send the full report only to shareholders who specifically request it?  After all, every company's full report is posted on its website anyway.

If we truly want to be "Asia's World City", shouldn't we be taking better care of the world?.

No comments: