The board of Edinburgh Worldwide Investment Trust has called on its New York pursuer to clarify its demands ahead of a crucial meeting of shareholders next month.
In a letter sent today it says Boaz Weinstein, founder and chief investment officer of Saba Capital Management, has “stayed silent” on its strategy.
It is demanding he provides full disclosure of its reasons for wanting to remove the EWIT board and replace it with its own nominees.
The letter was sent after Saba last night highlighted governance concerns at the trust and failure to disclose chair Jonathan Simpson-Dent’s role as CFO at HomeServe, which received the largest retail company fine in FCA history.
Saba has also questioned the “trustworthiness” of the audit and financial expertise of EWI’s newest director, Gregory Eckersley, and highlights how the longest tenured director – Mungo Wilson – “should no longer be considered independent per the AIC Code of Corporate Governance”.
Once again, Saba pointed to the “mishandled SpaceX sell-down and the proposed merger with US Growth as recent examples of the board’s value-destructive pattern of prioritising the interests of Baillie Gifford over shareholders.”
Mr Weinstein said: “Under the leadership of Jonathan Simpson-Dent, the EWT board has operated as a pawn of Baillie Gifford. After five years of massive value destruction and a continued refusal to publicly confront Baillie Gifford’s recent mishandling of EWI’s SpaceX holding, there is no world in which Mr Simpson-Dent or any member of this board can accurately claim they are committed to maximising value for shareholders.
“Time and again, the board has given Baillie Gifford a free pass and shareholders have consistently paid the price.”
In its letter EWIT states that less than a year ago Mr Weinstein launched a similar campaign to replace the independent investment manager with Saba, change the investment strategy and pursue a liquidity event.
“That proposal was overwhelmingly rejected by shareholders who recognised your objectives for what they were – an attempt to take control of the board in order to pursue your own agenda rather than the long-term interests of EWIT shareholders as a whole,” says the letter.
“Twelve months on, you have launched a substantially similar campaign although this time you have stayed silent on your agenda.
“We can only assume it is the same as before. As you are aware, our board has sought to engage constructively with you on numerous occasions. We have proposed a number of credible options that would have provided liquidity and choice for all shareholders. You have rejected every proposal.
“As shareholders consider the resolutions you have put forward, it is both reasonable and necessary that they do so with full disclosure. Against that background, we believe you owe shareholders clear and direct answers to the following questions.
The board of the Baillie Gifford managed trust specifically wants to know it Mr Weinstein intends to change the investment manager, the strategy and fees.
It has demanded “clear and unambiguous answers to these questions by no later than 5 January so that shareholders may properly assess your proposals and make an informed choice.”
The meeting, requested by Saba, will take place on 20 January.
Saba wants to:
- Remove the “underperforming” incumbent directors: Jonathan Simpson-Dent, Mungo Wilson, Caroline Roxburgh, Jane McCracken, Mary Gunn and Gregory Eckersley.
- Elect three new independent directors – Gabi Gliksberg, Michael Joseph and Jassen Trenkow – “who bring the right experience and objectivity to maximise long-term value creation for all shareholders”.
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