RHG challengers get their say

The board of RHG will give dissenting shareholders a chance to ditch David Coe as a director and to elect two of the dissidents as directors at the annual meeting in Sydney on November 12.

Having asserted the requisition for a special meeting to consider the three proposals was invalid, the board of RHG agreed to deal with the plan anyway, though not quite as originally proposed.

There is almost a hint in the announcement to the ASX yesterday that the existing board might support the election of Steve Johnson and Greg Hoffman (the editor and owner of The Intelligent Investor newsletter) as directors.

The incumbent board will continue to back Coe, a long-time colleague of John Kinghorn, the founder of RHG, who is also the company's chair and, with his son, the controlling shareholder.

The resolution to remove Coe as a director won't be put, though that's effectively redundant since he's up for election anyway.

The board of RHG, however constituted, has to maximise earnings from running down the back book originated when the firm was known as Rams Home Loans (a brand since sold to Westpac).

While highly profitable in recent times the earnings are declining in line with the book and with plenty of questions over the certainty, and pricing, of funding.