31st Jan 2020 18:32
(Alliance News) - A spokesperson for Samuel Tak Lee, a major Shaftesbury PLC shareholder, spoke out following an annual general meeting in which three resolutions failed to pass due to his opposition.
"Company directors must not be allowed to behave like company owners. Directors must always act in the best interests of all shareholders; Shaftesbury's board failed to do this and undertook an unnecessary capital raising for an improper purpose. Naturally, Mr Lee no longer has faith in the board to protect the value of that interest going forward," said the spokesperson.
Tak Lee holds a 26% stake in the property firm and represented 28% of the votes cast at the AGM. His intention to oppose resolutions 2, 4, 5, 8, 15, 16, 17, and 19 was announced on Tuesday last week.
While ordinary resolutions 2, 4, 5, 8, and 15 obtained shareholder approval with a simple majority, resolutions 16, 17 and 19 were special resolutions and did not obtain the 75% approval needed to pass.
In June, Shaftesbury said it had been served with legal proceedings issued by companies controlled by Tak Lee relating to allegations and claims relating to a December 2017 Shaftesbury placing.
In this placing, Shaftesbury issued 27.9 million shares at a price of 952 pence per share, carried out on a non pre-emptive basis and at a 6.6% discount to the firm's closing share price on December 5 of 1,001.00 pence.
The claimants are challenging both the rationale for the placing and how the shares were allocated, and are seeking GBP10.4 million in damages for alleged losses.
"Shaftesbury is well aware that the first claim in these legal proceedings is for a declaration from the court that certain directors (including the current chief executive) acted in serious breach of their fiduciary duties. These proceedings will be of significant interest both to other shareholders looking to see proper standards of corporate governance upheld, and to the wider market as a whole," said Tak Lee's spokesperson.
"Despite Shaftesbury's assertion that the proceedings have 'no merit', they accept the issues in these proceedings are ones that require resolution by a court following a trial that is now expected to take place in 2021.
"Regrettably and contrary to Shaftesbury's RNS announcement, the board has failed to engage meaningfully with Mr Lee over his concerns at every stage of this process," they spokesperson added.
Resolution 16 was to grant directors authority to disapply pre-emption rights, 17 granted authority to disapply pre-emption rights for an additional 5% only in connection with an acquisition or specified investment, and 19 was to call a general meeting, other than an annual general meeting, on not less than 14 clear days' notice.
While Tak Lee appeared to be the only objector to resolution 16, 30% of votes were against resolution 17 and 32% were against 19 - suggesting some agreement from other shareholders.
This was a repeat of the company's AGM in 2019, when Tak Lee's opposition prevented three similar resolutions from passing.
"Aside from the matters related to the litigation, the board will continue its efforts to engage with Mr Lee on all other aspects of the company's business," said Shaftesbury.
Shares in Shaftesbury closed down 0.1% at 899.00 pence in London on Friday afternoon.
By Anna Farley; [email protected]
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