Reuters article re: annual meetingReuters
UPDATE - ATI's Ho says will fight insider trading charges
Wednesday January 29, 7:08 pm ET
By Jeffrey Hodgson
(Adds comments from shareholders, company officials)
TORONTO, Jan 29 (Reuters) - ATI Technologies Inc.
(Toronto:ATY.TO - News) Chief Executive Kwok Yuen Ho told a
meeting of angry shareholders on Wednesday he will "vigorously"
fight allegations of insider trading by Canada's senior securities
watchdog.
The statement by the founder
of the graphics chip maker
kicked off a raucous annual
meeting where irate investors
lambasted management and
nearly succeeded in voting
down a contentious options
package.
It was the first major public
appearance by the chief
executive since the Ontario
Securities Commission
alleged on Jan. 16 that Ho and other ATI insiders improperly sold
their stock ahead of a May 24, 2000, profit warning that knocked 53
percent off the share price over two days.
The accusations add Ho to a growing list of high-profile business
leaders -- including lifestyle guru Martha Stewart -- who have made
headlines due to allegations of questionable trading practices.
Ho and his wife Betty are accused of avoiding a total loss of C$6.9
million ($4.5 million) by selling shares before the warning, and by
donating shares to a charity before the news, thereby maximizing a tax
benefit.
"I would never do anything to jeopardize, or in any way harm the
company's reputation or my own. I helped build ATI, and I care
deeply about it's future success. I intend to vigorously defend myself
against the allegations," Ho told the company's annual meeting in
Toronto.
"I am confident that when the process has concluded the (authorities)
will find my actions were entirely proper," added Ho, who declined
to comment on the matter further.
Some commentators had predicted Ho could step down at the annual
meeting. But the chief executive gave no indications of his plans and
was re-elected chairman.
ATI's chief financial officer, Terry Nickerson, said a special
committee of the board is investigating the matter and is expected to
report and make recommendations before the end of February.
ANGER AT OPTIONS PLAN
The Ontario Securities Commission (OSC) is seeking a permanent
trading ban on Ho and other accused ATI insiders, barring them from
serving as officers and directors of public companies, and forcing
them to repay profits as well as the costs of the investigation.
Following Ho's statement, management was hammered with questions
from ATI shareholders who have seen the stock fall 68 percent in the
past 12 months.
Many were angry with a contentious proposal that the amount of
options that can be granted to directors, officers and employees be
increased to a maximum of 47 million shares from 38 million shares.
That figure represents 19.8 percent of its issued and outstanding
common shares.
Many institutional investors complained the plan was overly dilutive
and vowed to vote against it. The plan was approved by just 54
percent of shareholders, an unusually close showing.
One shareholder said the option plan had brought the company to
state of "pernicious anemia". Another said they were "outraged" at
what has been done to the company, while a third said "there's no
profit for anybody but the management".
Duncan Stewart, a portfolio manager with Tera Capital Corp., said
he did not accept management's claim that the options were needed to
retain top designers, was similar to that of rivals, and was needed in
case the company pursues acquisitions.
"This timing, this size says to me that you value the shares of the
company less than I do. I think that's a poor message to send," Stewart
said, triggering applause from fellow shareholders.
SHARES WEAKEN
Ho refused to answer questions from journalists following the
meeting and used a back door to try to rush past photographers.
ATI President David Orton and CFO Nickerson held a press
conference afterward in which they were grilled about why the CEO
was not present and what would happen if Ho were forced to step
down.
"I don't think that he felt that he had anything to add to that, nor do
we," Nickerson said.
ATI shares closed down 8 Canadian cents, or 1 percent, at C$6.77 in
Toronto with more than 2.4 million shares changing hands. On
Nasdaq the stock fell 4 cents to $4.45.