The EGM this morning to vote on the removal of the Birketts was called by rebel shareholders Arlington special situations fund and Armadillo Investments who had lost confidence in the corporate governance standards at Prestbury and accused the pair of presiding over “huge value destruction” at the business.
The shareholders were also concerned about the Birketts’ remuneration levels and the write down of a loan of more than £850,000 from Prestbury group holdings to Prestbury Investment Management, a packager that was formerly part of the group, but is now owned by Lee Birkett.
Conservative shadow minister for the cabinet office and Prestbury chairman Francis Maude recently proposed a board restructure so that there would be a non-executive majority, but this was blocked by the executives.
Lee Birkett vigorously defended his position against the shareholders’ allegations claiming he had absorbed the overheads at PIM and that both his and his mother’s salaries were modest at £60,000.
He revealed in an open letter on August 10 that shareholders representing 44 per cent of holdings had already irrevocably decided to vote against the resolution for his removal.
The shareholders included himself, former chief operating officer and co-founder Stephen Keenan, sales director Kevin Sample and the Employee Benefit Trust, which Birkett was allowed to use to vote in his favour.
Following today’s EGM result, Lee Birkett says the company is pleased to put an end to the uncertainty surrounding its leadership team.
He says: “The EGM requisition has been an extremely stressful, expensive and time consuming distraction for all Prestbury personnel, whilst as a company being right at the heart of the credit crunch and associated challenges.
“The timing of the shareholder requisition could not have been any more damaging for the company, particularly when resources were so desperately needed elsewhere for the already stretched day to day business operations.”
He adds: “The vote is a transparent vindication of the executive’s positions and the chief executive officer and finance director would like to now get on and focus on delivering a positive service to the Prestbury adviser base and repay their loyalty during this negative requisition.
“Following the positive shareholder display of support today, we now look forward to delivering best shareholder value to all.”