RETAIL investors have seen "billions of dollars" worth of shares devalued in the aftermath of the global financial crisis, according to Australian Shareholders Association (ASA) chairman Ian Curry.
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"The system needs to be reformed," he said.
The fairness of capital raisings is to be a major focus for the ASA in 2014 which is also discussing the issue with the Australian Securities and Investments Commission (ASIC).
Mr Curry said institutional shareholders who were given the chance to "double dip" in this month's Ruralco share offer effectively bought more shares than they were originally entitled to, and have since seen the value of their stake in the company jump considerably after paying a cheaper price than if they had bought shares on the open market.
Small retail "mum and dad" shareholders were effectively penalised when a company's share offer to them was capped and the conditions shifted like this.
Mr Curry said small shareholders could end up with less effective voting control and a lesser portion of the returns generated by a company's earnings.