Update: The embattled board of Maven Renovar VCT (MRV) has hit back at former fund manager Paul Jourdan’s “conflicted” bid to gain control of the £89m venture capital trust that controversially sacked him and his employer, Amati, last year.
Publishing a circular for the shareholder meeting requisitioned by Jourdan who is seeking to be elected a director, the board revealed the veteran smaller company investor had turned down a proposed tender offer that would have let him and other dissident shareholders exit at asset value.
“This surprised the board given the requisitioners’ desire for liquidity and capital returns,” the company said, although it added some requisitioners had been in favour.
The company, whose attempt to change the company’s investment policy from AIM to unquoted stocks under new manager Maven Capital Partners, was blocked by shareholders earlier this year, said it would consult with shareholders on proposals for “a material tender offer”.
It said this would take place at around the end of the year once a majority of shares had been held for five years and shareholders qualified for the income tax relief they had already received.
Robert Legget, who was appointed to the board in June after its other directors were ousted by shareholders in an historic first for the VCT sector, said the disagreement over the tender offer was the biggest of a “number of conflicting themes” raised in the discussions with Jourdan and his fellow requisitioners.
He said the board believed the underperformance of Jourdan and Amati and the level of losses incurred in their last five years had been “unsustainable” and led to a wider loss of confidence in their ability to adapt to the challenges of the AIM and VCT market.
It had followed “best and standard practice” in ensuring the portfolio management arrangements were “fit for purpose”, adding that it was “entirely normal” for the board of a listed investment company to select and appoint a fund manager without a shareholder vote, as Amati had been in 2010.
Broadening its defence, the board said the three people proposing to join Jourdan on the board, Charles McMicking, Kathleen McLeay and Hector Kilpatrick, had not served on other investment companies or VCTs. This lack of experience was serious given the complex rules and regulations that VCTs had to follow.
Legget urged shareholders to come out in numbers and vote at or before the two meetings on 13 August in which the current board is seeking to be re-elected and thwart the requisitionists’ bid to be appointed.
He said: “Shareholders have a very simple choice: to let the former investment manager, whose performance caused significant loss to the company onto the board and into a conflicted position alongside other proposed directors selected by him/the requisitioners, or to agree with the independent board that a credible plan to halt this decline was in shareholders’ best interests.”
In their reply, Jourdan and the requisitionists condemned the “one-sided” portrayal of events by the board.
Urging shareholders to support their resolutions, they stated: “At its heart, the question being asked of shareholders is whether they wish the VCT to continue to make new qualifying investments (which involve substantial risks), where these will be mostly in private companies, despite not having any requirement to do this under the VCT legislation; or whether they would prefer to have all surplus capital returned, whilst maximising shareholder value by keeping exposure to the best companies in the existing portfolio, potentially for many years.
“The requisitioning shareholders are proposing the latter and have proposed a new board of directors to implement this strategy.”
