Regardless of whether shareholders take action, journalists should be alert to company actions that may not be in investors’ best interests.

For example, in 2007, China National Offshore Oil Cor-poration Ltd. (CNOOC), which is listed in Hong Kong, sought to deposit funds for three years with another, state-owned company. Such a maneuver could have exposed shareholders to the risk of losses in an entity they didn’t own, so more than 52 percent of independent shareholders voted against the scheme at an extraordinary meeting called to consider the move.

Alert journalists might have noticed that CNOOC had engineered a similar deal in 2004. Shareholders had approved that transaction, but they had received short notice for the shareholders’ meeting, held during a holiday. A Bloomberg story at the time noted that “Chinese state-owned enterprises have been criticized for tapping profits from their publicly traded units…without shareholders’ knowledge.”

Hong Kong regulators later publicly censured CNOOC for violating disclosure rules on that 2004 transaction.