GetUp! loses bid to force Woolworths pokies vote

Activist group GetUp! has lost a Federal Court challenge to get poker machine giant Woolworths to hold an extraordinary general meeting in the next few months.

Woolworths is the largest owner of poker machines in Australia, owning 6 per cent or about 12,000 machines around the country.

GetUp! wanted to force the supermarket to hold an EGM where a resolution could be put to shareholders limiting the maximum bet on pokies to $1.

Woolworths took the matter to the Federal Court, saying it would be too expensive to run a separate meeting.

It argued it should be allowed to hold the EGM at the same time as its annual general meeting in November, and the Federal Court agreed.

GetUp! has long campaigned against pokies and has used Woolworths as a Trojan horse to get the issue back onto the agenda.

"It's not responsible to take money directly out of the pockets of gambling addicts and that's what the business is doing at the moment," national director Simon Sheik said.

Even though Woolworths successfully persuaded the court to delay the special shareholder meeting, Mr Sheik is claiming a win.

"We will use the coming months to make sure that Woolworths and its investors understand the loss as a result of this company's behaviour and its use of high-loss poker machines," he said.

Under the Corporations Act, if 100 shareholders ask a company for an extraordinary general meeting, the company has to grant it.

By law the meeting needs to be held within a couple of months, which is the main part of this Federal Court dispute.

GetUp! says it convinced 257 shareholders to demand Woolworths grant a special meeting.

The activist group wants to put forward a resolution that would limit Woolworths poker machines to a maximum betting limit of $1 per spin.

"This is an important issue to raise because it can't be sustainable into the long-term to make money from problem gamblers," he said.

"We're in this to change the company's constitution, but at the end of the day what we'll also settle for is the company making a commitment to try to clean up its act by putting a $1 limit on the poker machines."

Woolworths told the court the cost of running the extraordinary general meeting would be more than $550,000.

The cost of mailing the company's 400,000 plus shareholders would be $300,000 alone.

If GetUp!'s motion to limit the pokies to $1 per spin was successful, it would take effect from 2016, so Woolworths argued that moving the EGM to the company's AGM in three months' time would save it money and would not hurt anyone.

Sensible

Woolworths spokesman Simon Berger says it is a sensible outcome.

"We're very happy to have this discussion, but the commonsense time to do that was at our AGM in November," he said.

GetUp!'s demand for $1 per spin pokie machines is backed up by a Productivity Commission recommendation.

In its 2010 Gambling Report, the commission said limits on the maximum amount of cash that can be inserted into machines are set too high and recommended by 2016 that all machines be limited to $1.

"No-one disputes that for some people gambling is a very real issue and a problem," Mr Berger said.

"The question is how you minimise harm and Woolworths is one company that has an investment in hotels. There are many others and there are other forms of gambling.

"The question is how do you effectively tackle problem gambling and what measures are reasonable to implement."

Before Friday's court case, Woolworths called the GetUp! request a stunt.

Woolworths argued in court that by asking for the EGM to align with the AGM, it was protecting company assets and saving money for the majority of shareholders.

"Two hundred of them signed this petition but there are 422,000 other shareholders who didn't," Mr Berger said.

"But that's not to say that it's not a very real issue for them and for our company the issue of problem gambling.

"The issue is what do you do about it and Woolworths does have a commitment to being the most responsible operator of hotels in the country."

GetUp! does not expect the decision to form a precedent for future cases about shareholder rights to call extraordinary general meeting under the Corporations Act.

And despite Woolworths' success in its application to move the EGM, the company did not seek costs for the legal dispute.

Source: ABC News, 7 July 2012