By Stephanie Jacob
City of London Investment Co Ltd, the largest shareholder of the icapital.biz Bhd fund, has offered a written explanation of why it chose to oppose the reappointment of one of the latter’s directors, Tunku Abdul Aziz Tunku Ibrahim.
The reappointment of Tunku Aziz who is past 70 years old had been put forward as a resolution during the AGM but was opposed by City of London, together with Laxey Partners Ltd during the fund’s annual general meeting (AGM) on Oct 11, 2014.
Tan Teng Boo
Their decision to oppose the motion was heavily criticised by icapital.biz’s fund manager Tan Teng Boo, who is also a shareholder. Tan had questioned both the timing of their submission to vote by proxy against the resolution and the lack of explanation as to why they opposed the reappointment.
In a letter to Tan, the foreign investment company said it was concerned about the length of time since Tunku Aziz’s retirement from active employment and his knowledge of close-ended funds (CEFs).
The letter said “requisite experience and understanding of CEFs is more relevant than knowledge of the country or region in which the fund (City of London) invests”. It said that local expertise was the responsibility of the fund manager (in this case, Tan), who is hired by the board to provide these skills.
Addressing the length of time since Tunku Aziz retired, the letter said “directors should not start a new term in office if they have been retired from active employment for more than five years”, and added that is was concerned that any director “outside this criterion may be too far removed from current business practices or thinking, to truly add value to the board over the long term”.
However, Tan said that City of London’s explanation for its opposition to Tunku Aziz’s reappointment was feeble, among others questioning why it appears to target Tunku Aziz alone when the issues raised seem to apply to other icapital.biz directors too.
To recap, at the Oct 11 AGM it emerged that City of London together with Laxey Partners, holding a combined 11.39% had voted by proxy against the reappointment of Tunku Aziz just two days before the AGM.
In light of that, the icapital.biz board moved to put the resolution to a poll vote during the AGM. This meant the resolution would have had to garner 75% “yes” votes from shareholders present as the AGM to pass.
It was at this point that Tan objected in his capacity as a shareholder, proposing instead that the AGM be adjourned to allow all shareholders the opportunity to vote in view of City of London and Laxey’s decision.
The motion was passed, and the AGM adjourned to Nov 30. Subsequently, Tan has been vocal in calling for shareholders to come out in force this coming Sunday to cast their votes. And although not legally required, he has called for City of London to attend and to explain its decision to oppose Tunku Aziz’s reappointment. He said that while it was not a legal requirement, it was the morally right thing to do.
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