Investors barrack Rio Tinto bosses - Remarks about small shareholders return to haunt Sir Richard Sy

Investors barrack Rio Tinto bosses - Remarks about small shareholders return to haunt Sir Richard Sykes

Terry Macalister, The Guardian

Friday April 18, 2003

Rio Tinto was barracked by small shareholders and special interest groups at an annual meeting that marked a bad-tempered send-off for chairman Sir Robert Wilson.

A procession of speakers criticised the continued role of former GlaxoSmithKline boss Sir Richard Sykes as a Rio Tinto non-executive following his recent remarks that small shareholders should be barred from annual meetings.

The mining group was attacked over pension issues, alleged safety problems in Utah and for not making provisions for a number of legal cases being taken out against it. An exasperated Sir Robert eventually called for a vote to end the questions, saying: "I think we have had enough of that." One small investor, Robert O'Donaghue, described the board as "insatiable cormorants", querying why there was a pension deficit at the same time as increased payments for directors.

Robert Muriel, another investor, started the assault on Sir Richard, saying it was wrong for him to receive a 22% increase in his pay when he held small shareholders in such disdain.

"Sir Richard Sykes believes small shareholders should be excluded from AGMs but I have as much right as anyone to be here. You have got to wonder why he is there, though," said Mr Muriel.

Earlier this year Sir Richard said: "Why should one person with one share be able to have a cup of coffee and a sandwich and disrupt the company?"

Sir Robert, who retires in October, was unaware of what Sir Richard had said but insisted it was irrelevant to Rio Tinto's meeting, which was about company business.

After the meeting, Sir Richard said his remarks had been misunderstood. "My concerns were aimed at those special interest groups that buy one share in a company and then dominate the business of the meeting." Shareholders also criticised directors for being paid in sterling while investors received dividends in dollars. Sir Robert said it was highly regrettable but that directors were paid in pounds to reflect their place of residence.

Other critics questioned Rio Tinto's ethics. "The government must change company law to ensure the directors of irresponsible companies like Rio Tinto are made fully liable and accountable for their destructive impact overseas," said Friends of the Earth campaigner Ed Matthew.