Shareholders pressure St David’s for EGM

The St David’s investment trust, an almost collapsed company where assets are less than bank debt, is coming under pressure from shareholders to call an EGM. St David’s had raised £400m in new shares and bank debt at the height of the stockmarket bubble at the turn of 2000 before investing in other split-capital investment trusts, which then collapsed in value, dragging St David’s down with them.
Class Law, a law firm acting for some investors in St David’s, has written to holders of ordinary shares in the trust, a voting share class, in an attempt to collect 10% of the 102 million voting stock in issue in order to call an extraordinary general meeting.
This EGM would propose the resolution that the board of St David’s would appoint solicitors to examine whether legal claims for compensation could be brought on behalf of the trust against any former or current adviser or director and/or Aberdeen Asset Management.
Class Law says that, so far, more than seven million of the ordinary shares, held by 500 families, had supported its call for an EGM. However, it has not been able to write to all shareholders directly, as 51.5 million ordinary shares, at September 29, were held in nominee accounts where the beneficial owners could not be identified.
A representative of a family that invested in St David’s says: “I think Aberdeen or the directors should write to all shareholders asking if there should be an EGM.”
But a spokeman for Aberdeen says: “We do not think it is a good idea to spend money on solicitors. We are bringing out a circular to resolve the situation. Our job is to manage the trust [for free]. It is not our job to investigate ourselves; that is a question for the directors.”
The directors were unavailable for comment, but the chairman, John Cousins, has previously stated that the directors believed they always acted with propriety.