The City watchdog has been urged to intervene to stop a US hedge fund repeatedly targeting British investment trusts.
Saba Capital has announced a third attempt to oust the board of Edinburgh Worldwide Investment Trust (EWIT) despite massive opposition from other shareholders.
Saba, run by poker-playing financier Boaz Weinstein, last week said it would call a vote to remove the directors of EWIT and replace them with its own nominees – less than two weeks after a previous attempt was voted down.
It is the third time Saba has tried to remove the directors, after an initial attempt to oust the board last year.
The Association of Investment Companies (AIC), an industry body, said it had called on the Financial Conduct Authority (FCA) and the Government ‘to protect retail shareholders’ interests’ and stop the ‘repetitive attacks’ by Saba on the sector.
‘It’s time for the regulator and the Government to get to grips with the threat Saba poses and act to support UK companies,’ said AIC head Richard Stone.
High stakes: Saba Capital, run by poker-playing financier Boaz Weinstein, pictured, last week said it would table a vote to remove the directors of Edinburgh Worldwide Investment Trust
He said a limit should be placed on how many times a shareholder could call votes on similar proposals, and that anyone nominated as a company director should be ‘subject to investor questioning and scrutiny’.
Stone added: ‘The current legislation does not give boards sufficient powers to stop the same proposals being brought forward repeatedly by a single shareholder when they have already been rejected.
‘This creates a distraction and cost to the detriment of other shareholders.’
Stone also called for laws that would make it easier for smaller investors – who often hold their shares through investment platforms – to vote on company proposals, and for measures to stop large funds from bulldozing through changes.
‘We urge the regulator and the Government to take action to support investment trusts and other UK companies from persistent attacks and protect retail shareholders,’ he added.
A government spokesman said: ‘Directors and shareholders have the power to decide what’s right for their business and should exercise their vote. We will continue to work alongside the FCA to ensure investment trusts are well run.’
The FCA did not comment but is understood to be ‘aware of the concerns’.
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