Unlocking Value

We, Argyle Street Management, do not want Elizabeth Kan (“Elizabeth”) to be a director of China Merchants China Direct Investments (CMCDI, 133 HK), because of her conflict of interest.

We are delighted, but not surprised, that Institutional Shareholder Services (ISS) shares our view.

ISS is the largest “proxy advisor” in the world with market share of 48%. It is trusted to provide independent research and voting recommendations to the world’s largest investors.

In its voting recommendation report, ISS recommended shareholders to vote against Elizabeth, precisely because of her conflict of interest:

Elizabeth Kan also has competing interests in her role in [CMCDI] and as an executive of [First Eastern Investment Group (FEIG)]. Elizabeth Kan is managing director of FEIG with which she is a founding member since its establishment in 1988.

The competing interests of Elizabeth Kan could be a cause for serious concern as she serves as an executive director of [CMCDI] and managing director of FEIG.

Elizabeth Kan’s executive role in FEIG could interfere with her roles and responsibilities as an executive director of [CMCDI] and on her ability to act in the best interests of [CMCDI].

Given the governance risks involved in the conflicting roles of Elizabeth Kan as an executive director of [CMCDI] and an executive of a competitor of [CMCDI], a vote AGAINST the reelection of Elizabeth Kan is warranted.

We urge Elizabeth Kan to step down from the board of CMCDI.

According to ISS’s voting recommendation guidelines, ISS “generally” recommends to vote for the re-election of directors, unless under the “extraordinary circumstances” of:

• Material failures of governance, stewardship, risk oversight… or fiduciary responsibilities;
• Egregious actions related to a director’s service on other boards that raise substantial doubt about his or her ability to effectively oversee management and serve the best interests of shareholders…

We now have a WeChat ID (ASM_Argyle) and WhatsApp ID (+852 6317 6371). Chat with us.

💬 WeChat 微信: ASM_Argyle

💬 WhatsApp: +852 6317 6371

🖥️ UnlockValueChinaMerchants.com

📧 ChinaMerchants@asmhk.com

---

我们Argyle Street Management不希望简家宜女士（以下简称”Elizabeth”）成为招商局中国基金（133 HK，“中国基金”）的董事，因为她存在重大利益冲突。

我们非常高兴，但也并不意外的是，Institutional Shareholder Services（ISS）与我们持有相同观点。

ISS是全球最大的”投票代理顾问”（proxy advisor），占该业务市场份额为48%。它备受全球大型的机构投资者们信任，为他们提供独立研究和投票建议。

根据ISS的投票建议报告，ISS建议股东反对简家宜女士的重选，原因正是因为她存在重大利益冲突：

简家宜女士在担任中国基金的职务以及第一东方投资集团（“第一东方”）的高管职位存在利益冲突。简家宜女士自1988年成立以来一直是第一东方的创始成员，目前是第一东方的董事总经理。

简家宜女士的利益冲突可能引起严重忧虑，她既担任中国基金的执行董事，又是第一东方的董事总经理。

简家宜女士在第一东方的高管职务可能干扰她作为中国基金的执行董事的角色和责任，影响她为中国基金最佳利益而履职的能力。

考虑到简家宜女士作为中国基金的执行董事和中国基金竞争对手的高管之间存在的治理风险，有理由反对重新选举简家宜女士为董事。

我们敦促简家宜女士退出中国基金董事会。

根据ISS的投票建议指南，ISS“通常”建议投票支持董事的连任，除非出现以下“非常特殊的情况”：

• 治理、监管、风险监督等方面存在重大失误，或履行董事受托责任存在问题；
• 董事在其他董事会任职期间存在严重违规行为，严重质疑其有效管理和为股东服务的能力…

我们现在有微信账号（ASM_Argyle）和WhatsApp账号（ +852 6317 6371）。如有任何问题，欢迎随时跟我们联系。

💬 WeChat 微信: ASM_Argyle

💬 WhatsApp: +852 6317 6371

🖥️ UnlockValueChinaMerchants.com

📧 ChinaMerchants@asmhk.com