For the second year in a row, shareholders supporting the company management at database services provider infoUSA Inc. prevailed in a proxy fight with one of its minor shareholders, Dolphin Limited Partnership LLP.
Shareholders at the infoUSA annual meeting June 7 overwhelmingly voted in favor of the company management’s choice of directors and proposals. Directors Bill Fairfield, Anshoo Gupta and Elliott Kaplan were each reelected to three-year terms, attracting 62 percent, 62 percent and 58 percent, respectively, of the vote.
“This man, Don Netter from Dolphin, was here for a quick profit,” said Vin Gupta, chairman/CEO of infoUSA. “He tried to greenmail us and that did not work. He claims he’s a long-term loyal shareholder and, at the same time, he’s selling stock in the company.
“The other shareholders can see through it and that’s why we got 62 percent of the vote,” he said. “He’s only for himself and not for any other shareholders.”
Sixty percent of the shareholders also approved an equity incentive plan, despite the concerns raised by Dolphin, which owns 3.6 percent of infoUSA’s stock.
In addition, 91 percent of the shareholders ratified the selection of KPMG LLP as Omaha, NE based infoUSA’s independent auditor.
The company’s position was certainly helped by Mr. Gupta’s 41 percent stake in infoUSA.
Cardinal, 5.5 percent owner of infoUSA, claimed that Mr. Gupta or his board did not entertain any questions or hear comments from shareholders at the annual meeting.
“In my 22 years of investment experience and attending annual shareholder meetings,
I have never been to one where the CEO and the board refused to take questions or hear comments from shareholders,” said Robert B. Kirkpatrick, managing director at Cardinal.
“The continued lack of attendance by more than one out of seven of the independent directors at this year’s annual meeting, as well as the failure of infoUSA to follow its own published rules for the annual meeting and not allow a single question or comment from a single shareholder only serves to reemphasize their indifference to the majority of infoUSA shareholders,” he said.
Dolphin claimed the infoUSA meeting in Calverton, MD, lasted five minutes.
The company also said in a statement that only two of infoUSA’s eight-member board, Mr. Gupta and Mr. Fairfield, attended the annual meeting.
“It was an annual meeting and a Q&A was not part of the agenda,” Mr. Gupta said.
Founded by Mr. Gupta, infoUSA owns list brokers and managers such as Walter Karl, Edith Roman, Mokrynskidirect and Millard Group. The company also owns Opinion Research Corp. and the SalesGenie lead generation service.
Dolphin, owner of about 2 percent of infoUSA, staged a proxy fight a year ago, questioning infoUSA’s corporate governance and accountability.
This year, proxy advisory firm Institutional Shareholder Services encouraged infoUSA shareholders to support Dolphin claiming infoUSA did not do enough to address concerns raised last year.
In 2005, Mr. Gupta offered to buy all outstanding publicly held shares of infoUSA, a move that would have privatized the company.
Several board members rejected the proposal, which Mr. Gupta later withdrew.
In a prior lawsuit, Dolphin and Cardinal alleged a trail of corporate abuse, including
$900,000 in air travel provided to former President Clinton and his wife, Sen. Hillary Rodham Clinton, and consulting contracts with the ex-president valued at $3.3 million.