A broker has been forced to U-turn on Brexit political donations during the UK general election following a threat of shareholder revolt at its AGM.
Nex Group revealed in its AGM notice that it had approved £5,000 each to five Conservative MPs running against pro-Remain Liberal Democrats in the general election.
But in the face of growing opposition from shareholder proxy services ISS and Pirc, which described the donation as an inappropriate use of shareholder money, chairman Charles Gregson will pay back the £25,000 personally, the Financial Times reports.
Gregson initiated the donations with support from the board.
The AGM notice had argued the donations had in the “best interests of the company and its shareholders”.
“The board felt it extremely important that the UK government had a clear mandate for the country to negotiate the best possible deal for the UK, following the decision to leave the European Union, in order to ensure that the position of London as the financial centre of Europe is maintained.”
It also called for shareholder approval for a further £100,000 for donations over the next year.
Shareholder proxy services ISS and Pirc described the donations as an inappropriate use of shareholder money and noted it is unusual for public companies in the UK to make explicit political donations.
The donations went to Alex Chalk, Ben Howlett, Luke Hall, James Berry, and Tania Mathias; however, only Hall and Chalk did not lose out to their Lib Dem rivals. Mathias lost to Vince Cable.
In a statement, Nex said: “It is clear that a number of them are opposed to public companies making modest political donations, even when supported by a strong business case. As a result, the chairman of Nex considers that it is appropriate that he reimburses the Nex Group the cost of the donations.”
Chief executive Michael Spencer, who has a 17.6 per cent stake in the business, is a prominent Conservative donor, but has said he voted against Brexit in last year’s referendum.