Dolphin Limited Partnership is once again urging shareholders to withhold their votes from infoUSA board members who are seeking re-election.
This year, Dolphin is contesting the re-election of Bill L. Fairfield; Anshoo S. Gupta; and Elliot E. Kaplan, whose seats are up for re-election come infoUSA’s June 7 annual meeting. But unlike its previous effort, this year Dolphin has not proposed a slate of three alternative directors.
In a separate election last year, investors rejected a slate of directors proposed by Dolphin and returned all three infoUSA candidates to the company’s board. Those three directors — CEO Vinod Gupta; George Haddix and Vasant Raval — will serve on the board until their next scheduled election in 2009.
“They have resorted to a press-release type of campaign,” said John Longwell, infoUSA’s general counsel. “They are not putting any money where their mouth is. Last year, they mounted a campaign in which they nominated a slate of directors and made all of the same arguments, and it was unsuccessful.”
In its most recent statement, Dolphin claims that infoUSA has not made good on a promise to enhance shareholder value. Dolphin cited changes in infoUSA’s stock price.
According to Dolphin, the per-share price as of April 27 reflects a 12.3% loss during a one-year period, a cumulative 10.7% gain over the most recent three-year period; and a cumulative 7.2% gain during the last 10 years.
Both during and after the proxy fight, infoUSA has aggressively acquired a variety of companies in a series of cash-and-consideration transactions.
According to Dolphin, current member Fairfield sits on infoUSA’s audit committee and is the board’s lead independent director; Anshoo Gupta is a member of the firm’s audit and compensation committees; and Kalpan is a senior partner of the company’s law firm.
Dolphin claims Fairfield was instrumental in extending, but making
permanent, an agreement under which Vinod Gupta would not be permitted to increase his stake of infoUSA. That agreement expires on July 21.
Anshoo Gupta, according to Dolphin, has been negligent in examining a
variety of transactions involving Vinod Gupta, and in September 2005 Kaplan disbanded a committee charged with exploring value-enhancing transactions after a failed bid by Gupta to take the company private, Dolphin claimed.
“We responded pretty extensively [to Dolphin’s allegations] last year,” Longwell said. “Essentially they are repeating the same arguments, and of course we don’t think they have any merit.”
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