TIDMCLIG
RNS Number : 6149A
City of London Investment Group PLC
02 June 2021
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA,
JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR INTO ANY OTHER
JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH
OF ANY APPLICABLE LAW.
2 June 2021
For immediate release
City of London Investment Group PLC ("CLIG")
Publication of circular
Further to the announcement by the Company on 6 April 2021, the
Company announces that it will today post to shareholders a
circular to convene a general meeting of the shareholders of the
Company (the "General Meeting") to be held at the Company's
registered office at 77 Gracechurch Street, London EC3V 0AS at
12.30 p.m. on 29 June 2021. The purpose of the General Meeting is
for shareholders to vote on a resolution to approve the
appropriation of distributable reserves in respect of certain
historic dividends and the entry into a shareholders' deed of
release and a directors' deed of release each as described further
in the circular.
Due to mandatory measures imposed by the UK Government as a
result of the spread of the COVID-19 virus in the United Kingdom,
the General Meeting will be convened with the minimum quorum of
shareholders present in order to conduct the business of the
meeting, which is in accordance with the latest guidance published
by the Department for Business, Energy & Industrial Strategy
and the Financial Reporting Council. Shareholders are therefore
requested to appoint the Chairman of the General Meeting as his or
her proxy as any other person so appointed will not be permitted to
attend the General Meeting. Further details are set out in the
circular.
The circular is also available on the website of the Company at
www.clig.com. The circular includes a letter from the senior
independent director, which is reproduced in the Appendix without
material adjustment or amendment.
For further information please contact:
City of London Investment Group Tel: 001-610-380-0435
PLC
Tom Griffith, CEO
Beaumont Cornish Limited (Sponsor) Tel: +44 (0) 207 628 3396
Roland Cornish, Michael Cornish
Zeus Capital Limited (Financial Tel: +44 (0) 20 3829 5000
Adviser and Broker)
Martin Green, Pippa Hamnett
Beaumont Cornish Limited ("Beaumont Cornish" or the "Sponsor"),
is authorised and regulated in the United Kingdom by the FCA, is
acting exclusively for the Company and no one else in connection
with the arrangements described in this Announcement and will not
regard any other person (whether or not a recipient of this
Announcement) as a client in relation to the arrangements described
in this Announcement and will not be responsible to anyone other
than the Company for providing the protections afforded to its
clients or for providing advice in relation to the arrangements
referred to in this Announcement.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Appendix 1
Letter from the Senior Independent Director, as set out in the
Circular
The Circular includes a letter from the Senior Independent
Director, which is reproduced in full below without material
adjustment or amendment. Terms used below have the same meaning
given to them as defined in the Part IV of the Circular.
"Introduction
The Board has become aware of a technical issue in respect of
the payment of certain historic dividends paid by the Company in
each of the financial years ended 31 May 2007 to, and including, 30
June 2019 (with the exception of the financial year ended 30 June
2018). The distributions affected by this issue are set out in
paragraph 1 of Part II of this Circular (the "Relevant
Distributions").
Accordingly, I, Peter Roth, as the Company's Senior Independent
Director, am writing to you today to explain the proposals to
address this issue and the action you are being asked to take, as
the Chairman of the Board, Barry Aling, along with a number of our
fellow Directors, are considered related parties under the Listing
Rules in connection with the proposals described in this
Circular.
This technical issue in respect of the Relevant Distributions is
of an historic nature and there is no change to the financial
outlook of the Company as a consequence. The Proposals described in
this Circular do not affect the Company's existing distributable
reserves nor its capacity to pay shareholder dividends going
forward in accordance with the Company's dividend policy.
Background
The Companies Act provides that a public company may only pay a
dividend out of its distributable reserves as shown in the last
accounts circulated to members or, if used, interim accounts filed
at Companies House. The requirement for the relevant accounts to
have been filed applies even if the company in question has
sufficient distributable profits and reserves at the relevant time
in its financial records.
Whilst the Group has at all times had sufficient distributable
reserves on a consolidated basis to cover the Relevant
Distributions, those reserves had not always been distributed
upward to the Company itself from its operating subsidiaries at the
time of declaration of each Relevant Distribution and were not
recorded, and therefore available, in the Company's own accounts.
In addition, interim accounts in respect of the Company were not
always filed, where required, with Companies House to show the
availability of sufficient distributable reserves in respect of
Relevant Distributions made by the Company. In such cases, this
constituted a breach of section 838(6) of the Companies Act which
requires a copy of the interim accounts to be delivered to
Companies House.
Therefore, regrettably, the Relevant Distributions were made
otherwise than in accordance with the Companies Act. The Board has
reviewed the Company's internal financial reporting procedures to
ensure that a similar situation does not occur in the future.
Separately, and as part of a wider review of the Company's service
providers, the Company is delighted to confirm the appointment of
Prism Cosec Limited as its corporate company secretary with effect
from 4 May 2021.
The purpose of this Circular is to convene a General Meeting to
propose the Resolution, which will, if passed, give the Board
authority for the appropriation of the distributable profits of the
Company to the payment of each of the Relevant Distributions and to
enter into the deeds of release described in Part II of this
Circular and put all potentially affected parties so far as
possible in the position in which they were always intended to be
had the Relevant Distributions been made in accordance with the
requirements of the Companies Act.
The Company has been advised that, as a consequence of the
Relevant Distributions having been made otherwise than in
accordance with the Companies Act, it may have claims against past
and present shareholders who were recipients of the Relevant
Distributions and against persons who were directors of the Company
at the time of payment of the Relevant Distributions. It is
therefore proposed that the Company enters into the Shareholders'
Deed of Release and the Directors' Deed of Release. The consequence
of the entry into these deeds by the Company is that the Company
will be unable to make any claims against:
(i) past and present shareholders of the Company who were
recipients of Relevant Distributions (the "Recipient
Shareholders"); or
(ii) all past and present directors of the Company who were
directors at the time a Relevant Distribution was made, being: (a)
the Company's current Chairman, Barry Aling; (b) certain of the
Company's current Executive Directors, namely Tom Griffith, Mark
Dwyer and Carlos Yuste; (c) certain of the Company's current
Non-Executive Directors, namely Barry Olliff, Jane Stabile and Rian
Dartnell; and (d) the following former directors of the Company,
Susannah Nicklin, Tracy Rodrigues, Lynn Ruddick, George Robb, Mark
Driver, Valerie Tannahill, Andrew Davison, David Cardale, Allan
Bufferd, Omar Ashur and Douglas Allison (the "Relevant
Directors"),
in each case in respect of the payment of the Relevant
Distributions otherwise than in accordance with the Companies
Act.
The entry by the Company into the Directors' Deed of Release
constitutes a related party transaction (as defined in the Listing
Rules) as Barry Aling, Barry Olliff, Tom Griffith, Mark Dwyer,
Carlos Yuste, Jane Stabile, Rian Dartnell and Susannah Nicklin are
considered related parties under the Listing Rules (being persons
who are, or were within the last 12 months, directors of the
Company) and each of them is a beneficiary of the deed. Therefore,
the Resolution will seek the specific approval of the Company's
shareholders for the entry into the Directors' Deed of Release as a
related party transaction, in accordance with the requirements of
the Listing Rules.
Further details and an explanation of the business of the
General Meeting and the related party transaction are set out in
Part II of this Circular.
Notice of General Meeting
A notice of General Meeting of the Company which will be held at
the Company's registered office at 77 Gracechurch Street, London
EC3V 0AS at 12.30 p.m. on 29 June 2021 can be found in Part V of
this Circular.
You are advised to read the whole of this Circular, including
the Notice, and not to rely solely on the information contained in
this letter.
Action to be taken
Due to mandatory measures imposed by the UK Government as a
result of the spread of the COVID-19 virus in the United Kingdom,
the General Meeting will be convened with the minimum quorum of
shareholders present in order to conduct the business of the
meeting, which is in accordance with the latest guidance published
by the Department for Business, Energy & Industrial Strategy
and the Financial Reporting Council. Shareholders are therefore
requested to appoint the Chairman of the General Meeting as his or
her proxy as any other person so appointed will not be permitted to
attend the General Meeting. A shareholder may appoint more than one
proxy in relation to the General Meeting provided that each proxy
is appointed to exercise the rights attached to a different share
or shares held by that shareholder.
Shareholders can vote either:
-- by logging on to www.signalshares.com and following the instructions;
-- by requesting a hard copy Form of Proxy from the Registrar on
0371 664 0300. Calls are charged at the standard geographic rate
and will vary by provider. Calls outside the United Kingdom will be
charged at the applicable international rate. The Registrar is open
between 9.00 a.m. - 5.30 p.m. Monday to Friday, excluding public
holidays in England and Wales; or
-- in the case of CREST members, by utilising the CREST
electronic proxy appointment service in accordance with the
procedures set out in the notes to the notice of General
Meeting.
To be valid any proxy vote must be received by the Registrar by
no later than 12.30 p.m. on 25 June 2021.
Further details are given in the notes to the notice of General
Meeting set out on pages 22 to 24 of this Circular.
This letter is also being sent to those who have been nominated
to receive information rights under section 146 of the Companies
Act who do not themselves have a right to appoint a proxy or
proxies. The attention of such nominated persons is drawn to note
10 to the Notice set out on page 24 of this Circular.
Recommendation
The Board, who has been so advised by Beaumont Cornish, believes
that (i) the waiver of claims against the Relevant Directors
pursuant to the Resolution and (ii) the entry into each of the
Directors' Deed of Release and the Shareholders' Deed of Release,
are fair and reasonable so far as the shareholders of the Company
are concerned. Beaumont Cornish has taken into account the Board's
commercial assessment of the effect of the Proposals. Further, the
Board considers the Resolution is in the best interests of
shareholders as a whole. The Interested Directors who are related
parties as defined in the Listing Rules, have not taken part in the
Board's consideration of these Proposals.
Accordingly, the Board unanimously recommends that shareholders
vote in favour of the Resolution at the General Meeting, as the
Independent Directors intend to do in respect of their own
beneficial shareholdings amounting in aggregate to 16,202,898
Ordinary Shares, representing approximately 31.97 per cent. of the
Company's current issued share capital and approximately 33.34 per
cent. of the Ordinary Shares eligible to vote on the
Resolution.
The Interested Directors and Susannah Nicklin, as related
parties under the Listing Rules, being persons who are currently or
were within the last 12 months directors of the Company, and who
also hold Ordinary Shares, are precluded from voting any Ordinary
Shares in which they are interested on the Resolution and
therefore, they have each undertaken to abstain, and to take all
reasonable steps to ensure that their respective associates
abstain, from voting on the Resolution. As at 1 June 2021 (being
the latest practicable date before the publication of this
Circular), the Interested Directors and Susannah Nicklin held, in
aggregate, 2,084,151 Ordinary Shares in the capital of the Company,
representing approximately 4.11 per cent. of the Company's existing
ordinary share capital.
In accordance with current best practice and to ensure voting
accurately reflects the views of shareholders, it will be proposed
at the General Meeting that voting on the Resolution will be
conducted by poll vote rather than by a show of hands and the
relevant procedures will be explained at the General Meeting.
If the Resolution is not passed, the Company may continue to
have claims against the Relevant Directors and Recipient
Shareholders.
The Board has taken steps to ensure that, in the future, the
issues referred to in this Circular do not arise in relation to the
payment of dividends. We are grateful for shareholders'
understanding in respect of the issues set out in this
Circular.
On behalf of the Board, thank you for your continued support of
the Company.
Yours sincerely
Peter Roth
Senior Independent Director"
ENDS
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END
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