Pacific Internet reminds me a little of Macauley Culkin, the child star from the Home Alone movies. PacNet, like poor Macauley, has been the focus of a battle for control among its parents – in this case the major shareholders: Vantage Corp and MediaRing. That battle takes another step tomorrow with an extraordinary general meeting at 3pm at PacNet headquarters in Science Park, called by Vantage Corp: it wants PacNet's board to resign and its directors to stand for re-election, all except the directors that MediaRing nominated, namely Walter Sousa and Khoo Boon Hwee.

I have commented before on this blog how futile I think this battle is. And I would leave my commentary and arm-chair opinions at that if I could figure out the logic to Vantage Corp's reasoning.

Consider the facts:

Vantage Corp owns 28.6% of PacNet and has two directors on the board.

MediaRing owns 29.6% of PacNet, and also has two directors on the board.

Vantage wants the MediaRing directors off.

Why?

That is the simple question.

Why?!

Afterall, MediaRing owns 1% more of PacNet.

Yes, I know, Vantage argues that their strategy is better and so on, but simple mathematics determines that MediaRing should be entitled to at least as many directors as Vantage Corp.

As the Business Times reported this morning: "Observers noted that Vantage has yet to publicly provide reasons as to why it wanted directors appointed on or after Sept 8 - namely the two MediaRing representatives - removed."

Amen!

If Vantage really has a noble motivation for wanting the MediaRing directors removed, it should communicate those better to shareholders.

A check of the corporate announcements page of the SGX shows that Vantage Corp's statements – beyond the ones written by lawyers for the sake of corporate disclosure – have not matched MediaRing's in their effort to communicate their motivations.

Vantage Corp should know that as much of this battle must be fought in the minds of the investing public as in the minds of shareholders who will vote tomorrow. Particularly because this vote takes place in Singapore, not the US where PacNet is listed.

But there is the saving grace: at last, shareholders of PacNet will have the opportunity to tell Vantage and MediaRing what they think of their squabble.

In the meantime, while the battle rages, what is happening to the child? Well, in Macaulay Culkin's case, he took them to court to get his money back. PacNet reports earnings on Monday November 13 and hopefully we will get to see some sort of indication about what sort of impact – positive or negative – its two fighting parents have had.


Mark Laudi