An extraordinary general meeting held at the Pomme d’Or Hotel resulted in a climbdown for the board after shareholders voted out two resolutions.
t also emerged that the company intends to pursue legal action against its former managers, Aberdeen Asset Management, who were sacked in April over losses of £165 million from split capital investments.
Aberdeen, who are under investigation by the Jersey Financial Services Commission, refute the claims.
esterday’s meeting attracted considerable interest from the Irish media, as the company holds significant office property interests in Dublin.
There has also been speculation that Irish developer and shareholder Noel Smyth, who has built up a stakeholding of ten per cent, intends to mount a bid in concert with the Dawnay Day Properties group which holds 29.
5% of the ordinary shares.
However, they are up against principal shareholder Treasury Holdings Ltd, another Irish property company which set up REO with Aberdeen Asset Management in 2001 and has three directors on the REO board.
esterday’s meeting was called to decide if the REO board should be authorised to buy back up to 14.
9 per cent of the share capital, but the votes failed to get to the required majority of two-thirds.
The shareholders were also asked to exempt Treasury Holdings from making a mandatory offer if its aggregate holding increased as a result, a motion defeated by 60 million votes to 13 million.
he shareholders who attended, including Mr Smyth and Dawnay Day chairman Guy Naggar, argued that Treasury already dominated the board and had an unfair advantage.
They repeatedly asked the board to explain how the resolutions would benefit the smaller shareholders.
REO director and retired Jersey solicitor David Moon said that it was common practice for boards to have the power to buy back their own shares.
He said that Treasury had been in the same position from the start.
‘Everyone bought shares with their eyes open,’ he said.
sked what the board intended to do about the suspension of dividends, chairman Ray Horney said that they had every intention of bringing dividends back but had to ensure that there were the right finances to do so.
nvesco International Ltd, who were appointed in May as managers to REO, said that they would be recommending the sale of some of the smaller assets.
Despite bank debt of £299 million, Invesco say that the company has a strong portfolio of properties and is well positioned for future growth.