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Saddam Hussein Would Be Envious of Democracy CRH-Style

Posted on: May 21st, 2007 1 Comment

About four hundred well-heeled shareholders showed up for the CRH AGM bang in the centre of Ballsbridge recently. They were ducking no one. The board was on parade. The contrast with the attendance at the recent EBS annual meeting could not have been starker. EBS members look less prosperous, more downtrodden mainly because they are. At the EBS shootout there was sedition in the air. Down at CRH there was middle- class contentment. The shareholders were anaesthetised, high on healthy profits.

CRH was even making the news last week. John Magnier and JP McManus were rumoured to be in the market for shares. Nothing was more certain to provoke a bit of colour and comment at the AGM. The two musketeers had sent the share price north. The board was sure to be forced to clarify the rumours.

Yet not a whisper of the colourful duo surfaced.

Pat Molloy, the departing chairman, ran the meeting with cold precision. He read the mandatory piece of self-praise, bored the shareholders to death, sent them to sleep and then invited questions.

Jeremy Craig, an articulate former diplomat, asked a sensible question about climate change. Molloy was well-greased, probably by the top-dollar spinners who orchestrate all CRH events. Suddenly, the smell of sulphur surfaced.

Seamus Maye, a long-time opponent of CRH, took a calm swipe at the board. He reminded the audience that CRH had been fined for flouting cartel laws, that it faced huge liabilities for this in the US, and that it was involved in illegal dumping.

The shareholders were silent.

Maye even mentioned two taboo subjects CRH’s flirtation with Ansbacher bank; and worse still, the fact that the company faces accusations of destroying sensitive evidence in an important Polish court case. Molloy, soothing the soporific shareholders, offered a blanket denial of the allegations, avoiding the specifics, and moved on.

The docile crowd nodded back into its slumbers. Their attitude was pretty clear; cartels are awful, but not quite so awful if they are your cartels . This cartel has done its shareholders proud. CRH shares have risen by 88 per cent in the last seven years.

A sycophant in the front row countered Maye’s assault by supporting the board. In a stunning non sequitur, he claimed that the company could not possibly be a cartel as it was well-diversified! The same sycophant wanted to second Molloy’s proposals of all the board members standing for re-election. His enthusiasm was so embarrassing that poor Pat was forced to politely seek a different seconder.

The entire set piece went to order. The orchestration of the event was a bit over the top. It was a text-book case in how to deaden an AGM, right down to the top-of-the-range sandwiches and wine.

And then it came to the voting.

Remember, this is the company that annually paid large sums to political parties “in the interests of democracy.” The proxy votes on all resolutions were cast in favour of the board by 99 per cent to one. Saddam Hussein would have been envious of democracy CRH-style. Perhaps former CRH chairman Des Traynor even fixed him up with an Ansbacher account?

Later on, veteran board-hopper David Kennedy, who has been a part-time director for 18 years, was re-elected by 99 per cent to one. Molloy, the ex-Bank of Ireland boss, pronounced his pal, the ex-Bank of Ireland chief, as “effective” according to the board’s evaluations. He gave the same clean bill of health to Terry Neill, the current Bank of Ireland director.

The Bank of Ireland still crops up everywhere you find CRH. The cosy CRH/Bank of Ireland link remains. Guess who is CRH’s biggest shareholder? None other than Bank of Ireland Asset Management, with all of seven per cent of the equity. AIB does not hold even half that amount.

No one at the meeting seemed to recognise the underlying danger. CRH earns a significant percentage of its income in US dollars. The sleep-in failed to zone in on the threat to the company that exists as long as the dollar tanks.

Yet out on the world’s markets the price of CRH shares fell by nearly 1, while the shareholders at home sipped wine, coffee and exotic sandwiches.

Different horses…

CRH could always hold its annual meeting in New York in recognition of its huge US shareholder base and transatlantic earnings. Not on your life. US investors are notoriously penetrating and curious. Better to hold it in Dublin, where the mob is suitably tranquilised.

The secret to a successful AGM is location, location, location.