Action group aims to stop Spark renewal
Share
An action group is urging Spark venture capital trust shareholders to vote against a resolution to extend the life of the VCT by five years.
In a note to shareholders last week through the UK Shareholders’ Association, Spark Shareholder Action Group spokesman Tim Emmott says the investment performance of the current manager and its predecessors does not justify “five more unfettered years” and urges shareholders to vote against the board’s continuation proposals at the annual general meeting on May 7.
On April 1, Spark reported a 15 per cent fall in net assets to 22.7p per share as at December 31, 2009 from 26.8p a year earlier.
Emmott argues that the board’s current proposals for the £25m VCT can be significantly improved.
Among other criticisms, Emmott is dissatisfied with the dividend payment and claims that the manager has not done enough to pursue merger opportunities.
He says: “Our company has been placed in a position of paralysis, investments halted, with a cash pile, the board cut and only a wishy-washy statement about the future.”
If the resolution is voted down, the board must produce a new plan for shareholder approval within nine months. The VCT will wind up if one shareholder vote rejects this plan.
Spark invests in unquoted technology companies in the TMT and healthcare sectors. It has been criticised over dividends paid by the previous board, which triggered a £1m performance fee for the manager, despite a significant fall in net assets.
Spark chairman Robin Field says: “I understand their rationale but the consequences are overwhelmingly that the company would be wound up and shareholders would get a really derisory return.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
