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ABI warns of “grave” Barclays shareholder unrest

The Association of British Insurers’ Institutional Voting Information Service has put the Barclays forthcoming capital-raising vote on red alert.

The group, which represents many of Barclays’ largest shareholders, says there are now “grave concerns” regarding the £7bn fundraising by Middle East investors.

Barclays has proposed investment from Qatar and Abu Dhabi to help raise capital in lieu of Government intervention, meaning the investors would own around one third of the bank.

The shareholders are set for a crucial vote on the issue next Monday.

ABI director of investment affairs Peter Montagon says his group has talked to Barclays about changes to the proposed investment, but cannot ignore its members’ concerns.

Barclays is offering shareholders some of the £5.8bn injection from the Middle East investors and is scrapping this year’s executive bonuses.

Montagon says: “[Barclays’] changes cannot offset the concern of shareholders at the serious breach of the pre-emption principle, especially on an issue with a large discount. Other concerns include the preferential terms available to some investors, and the overall cost of the issue to existing shareholders.

“After careful consideration we therefore felt we had no choice but to proceed with a red top.

“A red top does not constitute advice to vote against the proposals, but rather the presence of an issue of grave concern. Shareholders will have to weigh up the relevant factors.”

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