ABN studies TCI options

Following is a letter sent to the Editor of the Financial Times:

Sir,

Let me see if I understand what is happening at ABN-Amro ("ABN studies TCI options" Financial Times March 1, 2007). The management of this bank is hiring four investment banks to advise them on how to manage dealings with some of its shareholders who have complained about the performance of management. Management is looking at strategic options as it builds up defences against those shareholders who have expressed dissatisfaction.

The Supervisory Board of this bank, who in theory are there to represent shareholder interests, have apparently accepted these actions (I haven´t heard anyone speak out against what is going on). Perhaps it is that these Supervisory Board members do not have enough time to do their jobs, as all of them have too many other commitments, the least of which have four (two of them) and a couple have as many as 17 and 18 board representations. It is impossible to provide adequate oversight with so many roles and clearly this results in absurd governance!

How can it be justifiable that management spend their time devising ways to defend themselves against their shareholders? They are spending shareholder money to help them come up with ways of neutralising potential troublemakers, some of their shareholders.

I am not taking a view of whether the vocal shareholders are right or not, but they have the right to make their views known and all shareholders have the right to a free and open debate.

It is clear that Supervisory Board members have failed in their responsibilities by allowing this absurd state of affairs. There should be wholesale changes of the Supervisory Board of ABN-Amro.

Onésimo Alvarez-Moro

See article:
ABN Amro has hired four investment banks to advise on strategic options as it builds its defence against a campaign by The Children’s Investment Fund (TCI), an activist hedge fund, for a break-up of the Dutch banking group.

People familiar with the matter said ABN has retained Rothschild, Lehman Brothers, Morgan Stanley and UBS to study its possible responses to TCI.

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