Caledonia update

Just to clear up the mystery of those donations tagged to the Conservative Party that I blogged about last year, I've had the email below from the Electoral Commission. Basically the Tories mucked up their admin -

Dear Mr Powdrill,

 

You contacted me last year about two donations to the Conservative Party that we published on our website PEF Online, which were reported as from Caledonia Investments PLC.

 

Both turned out to have been due to administrative errors, and the Conservative Party has now reported the donations from the correct donors:

 

International Caledonian Assets Ltd

 

The Cayzer Trust Company Ltd

 

Caledonia Investments update

Just keeping this one warm. As it stands, the Electoral Commission register of donations continues to list two donations from Caledonia Investments PLC worth £4000 in the financial year to 31 March 2015. As previously noted these were not disclosed in the company's annual report and were not covered by previous authority granted by shareholders (Fidelity voted in favour, natch) to make such donations.

As it stands, the FRC has told me that the company has "confirmed" to them that it did not make the donations. The Electoral Commission has told me that it is in discussions with the Conservative Party about the donations. On this basis of the info I currently have, I assume that the donations were wrongly logged by the Party, possibly because they were made by the Cayzer Trust (though I'm just speculating here). Otherwise, if the donations were made by Caledonia, I think company law has been breached.

Caledonia update

I've had a response from the FRC, which has been in touch with the company. Apparently the company "confirms" that it has not made any donations since 2010. However, as of today the two donations are still on the Electoral Commission website and attributed to Caledonia, so I've been in touch with the Commission, who in turn say they are talking to the Conservative Party.

Curiouser and curiouser...

Why hasn't Caledonia Investments disclosed its Tory donations?

A couple of weeks back I blogged that Caledonia Investments had made two separate donations of £2000 to the Conservative Party - received in December 2014 and mid March 2015.

To be crystal clear, according to the Electoral Commission the first donation was received on 12 December 2014, the second donation was received on 13 March 2015. Both donations fall within Caledonia's financial year which runs to the end of March and the total, obviously, is £4000. And one final detail - both these donations are tagged with are the same company number and name (which are also the same as previous donations made by Caledonia) so I don't think it can be claimed they are separate legal entities (if that matters).

As I blogged previously, it wasn't necessary to seek shareholder approval for this since the aggregate amount is less than the £5000 allowed in any 12 month period. However, I did expect Caledonia to at least make some sort of statement about the donations in its annual report.

Yesterday the company announced publication of the annual report, slightly earlier than its financial calendar had suggested. I spotted this late this afternoon, and I've subsequently had a read through it.

I can't see any mention of the donations at all in the annual report. It's entirely possible I'm being thick here, so please search the annual report for yourself here and let me know if you find something. I am very happy to correct this post as necessary. This apparent lack of disclosure contrasts with previous years when donations were reported, see page 26 of their 2010 annual report for example.

What is more, if my reading of the Large and Medium-sized Company reporting regulations is right - again I welcome any guidance from more knowledgeable people here - donations of more than £2000 in any one financial year have to be disclosed. I've posted the whole of the relevant section of the regs below for info, or you can view them online here.

So my first question is whether Caledonia Investments has met the reporting requirements for disclosing political donations. (To be honest, given the previous pushback they've had from shareholders on political donations I think they should disclose them whether required or not).

Given the possibility of breaching company law in this area I think it is very important that Caledonia Investments makes absolutely clear to shareholders how much of the company's money it has actually donated. If what I say above about non-disclosure is correct then currently Caledonia shareholders may not even know about these donations unless they look at the Electoral Commission register, or stumble on this blog.

Depending on what feedback I get, I will try and raise awareness of this, which leads onto my second question - should shareholders vote for an annual report that they know does not meet reporting requirements? This is resolution 1 on the AGM agenda.

Any feedback on any of the above much appreciated.

Political donations and expenditure

3.—(1) If—

(a)the company (not being the wholly-owned subsidiary of a company incorporated in the United Kingdom) has in the financial year—

(i)made any political donation to any political party or other political organisation,

(ii)made any political donation to any independent election candidate, or

(iii)incurred any political expenditure, and

(b)the amount of the donation or expenditure, or (as the case may be) the aggregate amount of all donations and expenditure falling within paragraph (a), exceeded £2000,

the directors’ report for the year must contain the following particulars.

(2) Those particulars are—

(a)as respects donations falling within sub-paragraph (1)(a)(i) or (ii)—

(i)the name of each political party, other political organisation or independent election candidate to whom any such donation has been made, and

(ii)the total amount given to that party, organisation or candidate by way of such donations in the financial year; and

(b)as respects expenditure falling within sub-paragraph (1)(a)(iii), the total amount incurred by way of such expenditure in the financial year.

(3) If—

(a)at the end of the financial year the company has subsidiaries which have, in that year, made any donations or incurred any such expenditure as is mentioned in sub-paragraph (1)(a), and

(b)it is not itself the wholly-owned subsidiary of a company incorporated in the United Kingdom,

the directors’ report for the year is not, by virtue of sub-paragraph (1), required to contain the particulars specified in sub-paragraph (2).

But, if the total amount of any such donations or expenditure (or both) made or incurred in that year by the company and the subsidiaries between them exceeds £2000, the directors’ report for the year must contain those particulars in relation to each body by whom any such donation or expenditure has been made or incurred.

(4) Any expression used in this paragraph which is also used in Part 14 of the 2006 Act (control of political donations and expenditure) has the same meaning as in that Part.

4.—(1) If the company (not being the wholly-owned subsidiary of a company incorporated in the United Kingdom) has in the financial year made any contribution to a non-EU political party, the directors’ report for the year must contain—

(a)a statement of the amount of the contribution, or

(b)(if it has made two or more such contributions in the year) a statement of the total amount of the contributions.

(2) If—

(a)at the end of the financial year the company has subsidiaries which have, in that year, made any such contributions as are mentioned in sub-paragraph (1), and

(b)it is not itself the wholly-owned subsidiary of a company incorporated in the United Kingdom,

the directors’ report for the year is not, by virtue of sub-paragraph (1), required to contain any such statement as is there mentioned, but it must instead contain a statement of the total amount of the contributions made in the year by the company and the subsidiaries between them.

(3) In this paragraph, “contribution”, in relation to an organisation, means—

(a)any gift of money to the organisation (whether made directly or indirectly);

(b)any subscription or other fee paid for affiliation to, or membership of, the organisation; or

(c)any money spent (otherwise than by the organisation or a person acting on its behalf) in paying any expenses incurred directly or indirectly by the organisation.

(4) In this paragraph, “non-EU political party” means any political party which carries on, or proposes to carry on, its activities wholly outside the member States. 

Caledonia Investments Tory cash drop 2

I've blogged previously about Caledonia Investments continuing to give the company's money to the Conservative Party, this time without shareholder approval. I've just spotted that actually they have done it twice in the past few months, first in Eastleigh, secondly in Finchley and Golders Green.

Together these donations total £4,000, so less than than the threshold set by the Companies Act to require a vote from shareholders to approve them. It probably seems like small beer to people in the City, but I imagine Labour wouldn't have minded an extra £2000 in Finchley and Golders Green.

Caledonia's annual report will be published in just under three weeks according to their financial calendar, so I'll be keeping a look out for how they report these donations. The company's AGM is on 16th July, so it will be interesting to see if shareholders take any action, though as Caledonia presumably won't seek shareholder authority to make donations this time investors may need to use another resolution for any protest vote.

More generally, as I argued previously, these donations are a bit troubling as they are being made by a company which has previously received a strong signal from its independent shareholders not to spend the company's money in this way. Caledonia Investments looks to be taking advantage of a weakness in the Companies Act because it knows it would face resistance if it went over the £5000 threshold and had to seek shareholder approval.  

I'm not sure why that exemption was put in the Act in the first place, but Caledonia seems to be making a pretty good case for its removal.

Caledonia's sneaky Tory cash drop

Well this is interesting. It turns out that Caledonia Investments hasn't quite given up on using company money to fund the Tories after all. I speculated last June that they may have given up. My reasons for thinking this were a) they had made no donations since 2010 and b) they had not sought shareholder approval to do so since 2009.

This remains true, Caledonia has not sought shareholder approval to make political donations since July 2009 when almost 20% of shareholders voted against. As I understood it, because that authority was used (as donations were made during the subsequent 12 months) approval would needed to have been sought again to make further donations. As no authority was sought at the 2014 AGM (the last chance to do so before the election) it looked liked they weren't going to do it.

But then I spotted that Caledonia had indeed made a donation of £2,000 which was received by the Tories in mid December 2014, and looks like it has gone to the local party in Eastleigh, a key target seat to take from the Lib Dems. On the face of it this looks like it isn't permissible, but apparently there is a threshold for donations that require shareholder authority of £5,000 in any 12 months. Only donations over that amount require approval.

It doesn't look great does it? This is a company that knows that a) you are expected to seek shareholder approval for political donations and b) that its own shareholders do not like it making party political donations (as demonstrated by the July 2009 AGM vote). So it appears it has found a way to give the company's money to the Conservative Party without having to consult its shareholders and have a controversial vote. And this enables them to chuck a couple of grand into a key Tory target seat.

If you are a Caledonia shareholder, and/or a Lib Dem leaning corp gov type, you might want to have a look at this one. It looks to me like they are taking the mickey, and they might try and bung a few more quid over before the election.

Caledonia gives up on the Tories?

An interesting little snippet, today the investment trust Caledonia Investments issued its notice for the forthcoming AGM which includes the list of resolutions that will be put to the meeting. The thing I looked for straight away was if they were seeking authority to make political donations, as the company has been a regular Tory donor in the past, and quite noisy about it.

But there's nothing there - no such resolution. And this is, of course, the last AGM before the election where the company could seek such an authority. It looks to me like they may have, finally, backed off. For completeness, I checked whether the Cayzer Trust, the major shareholder in Caledonia, was still making donations, and indeed it is.

But the majority of Caledonia shareholders are not linked to the Cayzer family, and that's why I've always thought it was inappropriate for the company's money to be spent supporting a particular political party (though others - like Fidelity - obviously disagree).

So, hopefully, it looks like common sense has prevailed.

Caledonia Investments, a Scottish Tory and a PPC

More fun and games with our old friends Caledonia Investments. It struck me the other day that I hadn't checked out if they had given company funds directly to any MPs or candidates. It turns out they have in two cases, search under 'Caledonia' here.

Not big bucks in either case, but they gave £10,000 to David Mundell MP and £10,000 to Sutton and Cheam PPC Philippa Stroud. Both are notable in their own right. Mundell is the sole Scottish Tory MP, representing Dumfriesshire, Clydesdale and Tweeddale. An interesting choice, presumably decided on because in 2005 he won the seat with about a 2,000 vote majority and the Tories wouldn't like to have their Scottish representation removed again. It's not entirely clear to me how that might align with Caledonia shareholders' interests, but hey.

Philippa Stroud, who stood unsuccessfully for the Tories in Sutton & Cheam (against a Lib Dem by the way), briefly hit the headlines for the wrong reasons during the election after The Observer ran a story claiming a religious group she was involved in tried to 'cure' gay people. She denied it outright though, and it looks like it might have been a bit of a hatchet job.

Interesting votes

1. Creston. The rather bland RNS announcement might make you think nothing of note happened, but one resolution wasn't proposed or voted one. It turns out that resolution was seeking authority to amend an LTIP. Looks like they pulled it because they were going to lose.

2. Ashtead. Big vote against the rem report, and if you add in abstains it's a pretty small majority vote in favour.

3. Quintain. Big vote against the rem report and a bigger one the rem committee chair (who oddly was elected as both a director AND chair of the rem committee, with the vote against the latter position much larger). Also interesting to note our old chums Caledonia have a big stake (10%) and a seat on the board.

One for Lib Dem supporters in the City...

I'm not going to blog much about the election because a) I'm not very good at high politics and b) anything I post could basically be boiled down to 'vote Labour'. But since hostilities have formally started, I thought I would lob in a grenade.

So just to say that I'd be pretty annoyed about Caledonia Investments if I were a Lib Dem. After all, the case that Caledonia put to shareholders for using their money to fund the Tories was about the need to elect a Conservative government. I’ve been back and checked the AGM circulars issued to shareholders (available here) and there doesn’t appear to be any mention at all of the Lib Dems in any of them, though Labour is mentioned directly.

Yet, as I’ve blogged before, half of the money Caledonia has deployed so far has gone to the Meon Valley (a new seat this election) which is a Conservative-Lib Dem marginal with Labour a distant third. And when I went back and looked at where else they were chucking their cash about, it turns out that Caledonia has also given money to the Tories in other seats where the Lib Dems are clearly the target, not Labour:

Eastleigh – Chris Huhne’s constituency
Winchester – Mark Oaten’s constituency
Sutton & Cheam – a Lib Dem marginal
Romsey – an ultra-tight Lib Dem marginal

In total almost two-thirds of the money Caledonia has spent so far has gone on funding fights against the Lib Dems, not Labour. We’re not talking not big bucks – Caledonia has only given the Tories £133k in total so far – but the fact that the majority of it is being used against the Lib Dems doesn’t feel consistent with their arguments for making the donations.

I also wonder if those asset managers that voted for these donations knew that they would be funding anti-Lib Dem drives? You certainly wouldn’t guess that was the plan from the AGM circulars, or the comments from Tim Ingram made last year about the decision to fund the Tories:

"It is worth understanding why we are doing it. It is not for purely political reasons, it's economic reasons. We are an investment trust so we take equity positions in other companies, which are mainly British. We firmly believe that our shareholders will get greater wealth creation in the economic conditions created by a Tory government than by a Labour government."

If that were really the case, why not solely target Labour marginals, to ensure that less Labour MPs are elected?

Funny one, innit?

Caledonia funds Tories' anti-Lib Dem drive

Updated figures on political donations are now available on the Electoral Commission website. I can't see any further donations by Fidelity, but investment trust Caledonia Investments is keeping up the transfer of shareholders' money to the Tories. Notably of the £133,000 they have given to the Tories in the past two year half - £65,000 - has gone to Meon Valley. I'd never heard of the constituency, and a quick look on Wikipedia reveals that it is a newly-created one. What's more it looks like it will be a close fight between the Tories and the Lib Dems, with us a distant third. So a large part of Caledonia's money is being spent on an anti-Lib Dem campaign, rather than an anti-Labour one. Interesting...

Caledonia Investments' helicopter drop

Just a quick update on Caledonia Investments. As I've blogged previously, this investment trust has successfully (with the help of some well-known asset managers) passed resolutions to give shareholders' money to the Conservatives. It's starting to show up on the Electoral Commission register. They handed over nearly £100k from last Feb to this April, and £40K in the this April alone. Much of it is targeted at Meon Valley.

Here are the details of donations in 2009 that have been picked up so far.


Conservative PartyMeon Valley
Caledonia Investments PLCstatus: Companycompany reg no: 235481
Cayzer House30 Buckingham GateLondonSW1E 6NN
02/04/09
£ 20,000.00

Conservative PartyDudley South
Caledonia Investments PLCstatus: Companycompany reg no: 235481
Cayzer House30 Buckingham GateLondonSW1E 6NN
04/04/09
£ 5,000.00

Conservative PartyMilton Keynes Federation
Caledonia Investments PLCstatus: Companycompany reg no: 235481
Calidonia investmentsCayzer House30 Buckingham GateLondonSW1E 6NN
06/04/09
£ 5,000.00

Conservative PartyEaling Central and Acton
Caledonia Investments PLCstatus: Companycompany reg no: 235481
Cayzer House30 Buckingham GateLondonSW1E 6NN
07/04/09
£ 5,000.00

Conservative PartyEltham
Caledonia Investments PLCstatus: Companycompany reg no: 235481
Cayzer House30 Buckingham GateLondonSW1E 6NN
28/04/09
£ 5,000.00

Just a quick aside, here's what Caledonia chief exec Tim Ingram had to say as justification for the donations -

"It is worth understanding why we are doing it. It is not for purely political reasons, it's economic reasons. We are an investment trust so we take equity positions in other companies, which are mainly British. We firmly believe that our shareholders will get greater wealth creation in the economic conditions created by a Tory government than by a Labour government."

Stirring stuff, but if it's so important does he use his own money? Try searching the Electoral Commission list of donors for 'Ingram'. Surprisingly no Tim Ingram appears on the list. There is a Chris Ingram listed as a Tory donor, and Tim Ingram has middle initials C and W, so possibly that's him. But even if it is he's put in quite a bit less than Caledonia's shareholders.

Last week's votes

There were a couple of interesting (honest) AGM votes last week. First up Tory-funding investment trust Caledonia Investments once again passed a resolution authorising spending shareholders' money bankrolling Conservative campaigns in marginal seats. The resolution attracted over 18% against (AGM results available here as a PDF), plus marginal abstentions, which was slightly up on last year. But the important thing to remember is that the Cayzer family have a controlling stake of (from memory) about 50%, so a sizeable proportion of the free float voted against. However still a large block voted in favour, so I will be posting up the names of fund managers backing Tory donations once some data is available. As I pointed out previously, it's possible that a part-state owned asset manager supported this...

Secondly, I had to have a bit of a chuckle at the result at Yell where almost 30% voted against the remuneration report. Yell had been telling journos last week that investors were behind the remuneration policy. The interesting point to note is that under one of the harsh diktats laid down by the Walker Review, if the remuneration report at a BOFI gets more than a 25% vote against then the chair of remuneration committee should stand for re-election annually. And this is one of those recommendations where there is no good reason why it should not apply more widely, so I expect to see it in the FRC's next announcement on the Code. Which would mean Yell's rem chair will have to face an annual vote (unless they 'explain' why they aren't complying with this guidance of course).

UPDATE: Actually I made a mistake on Walker, the report doesn't say rem chairs should face annual elections if the report gets under 75% (of "total votes cast" btw, which might imply abstentions don't count), it says they should stand for re-election the next year. And having looked at Yell it seems that the current rem committee chair is already on an annual re-election cycle.

UKFI and Tory donors

I blogged previously that Caledonia Investments has its AGM coming up later in July where it is seeking authority to fund the Tories in marginal seats. It struck me that actually UKFI might have an indirect interest in this. The Lloyds Banking Group, in which UKFI has about a 43% stake from memory has two asset managers under its umbrella - Insight Investment and Scottish Widows Investment Partnership. If either of them have money in Caledonia they will have a vote on whether the company donates to the Tories.

Wouldn't it be a bit odd if they voted in favour?

Caledonia Investments plans to fund the Tories, again

Caledonia wants to give more shareholders' money to the Tories. See resolution 16 on its 2009 AGM circular here. Specifically they say:

The Board strongly believes that the hard decisions that need to be made to sustain economic recovery require the return of a Conservative Government at the forthcoming general election. It will be especially vital to curb the soaring level of public borrowing to achieve such a sustained recovery and the Board considers that only a Conservative Government will credibly address this critical issue. Otherwise, the long term prosperity of the UK as a whole, and the Company and its shareholders in particular, will be under severe threat. The Board also notes recent statistical evidence which shows that UK stock market returns have been significantly greater in periods of Conservative government than Labour government.
The Board is therefore of the firm view that it is in the interests of all Ordinary Shareholders again to seek approval for the Company to make donations of up to £75,000 in aggregate to the Conservative Party. As before, donations will be targeted towards building resources in marginal seats in the run up to the general election. This approval, if granted, will last until 1 January 2011 or, if earlier, the conclusion of the next annual general meeting of the Company.

Last year a number of fund managers voted for this proposal. If you are a trustee (pension or charity) check to see if you have any money in this investment trust, and if so you need to find out which way your manager plans to vote.

The AGM is on 23rd July.

What's the Tory link to The Times' Myners obsession?

Even though most of the press seems to have concluded that The Times coverage what Paul Myners did before being apointed City minister is a non-story, The Thunderer has ploughed on alone. But there's a dangling thread in today's story about the Ermitage hedge fund that someone should pull at. Look at this:

A spokesman for Caledonia Investments, which owns 40% of Ermitage, said Myners’s shares had been sold since January.

This should set alarm bells ringing straight away if you know anything about the Tory-City interface. Caledonia Investments - an investment trust - is one of the last remaining public companies to ignore best practice and spend shareholders' money on partisan political donations. At its last two AGM it has passed resolutions (easily doable because there is a controlling shareholder) seeking authority to give shareholders' money to the Tories. I mean directly to the Tories, not even via a think-tank or front organisation. And its AGM circulars for the past two years have included a rant about the need to cut the level of public spending.

And then have a look over at the list of Higher Rate Taxpayers' Alliance business supporters -

Tim Ingram, Chief Executive, Caledonia Investments

Given this background, what do you think Caledonia's view might be on clamping down on tax havens?

Anyone want to take a guess at who might be feeding The Times info for their stories? And is there any enterprising journo out there willing to have a dig around?

P.S. I've covered Caledonia a bit in the past. Click on the label to pull up previous (s)tories.

Fidelity and Caledonia update

Here's a curious thing. I've checked the Electoral Commission register of political donations regularly over the past few months and nothing has shown up for Fidelity in Q3. Their last registered donation to the Tories was £30K in May. (They've given the Tories just under £500,000 in total since 2004).

Caledonia Investments on the other hand has been spraying the cash around - £58,000 to a range of different local constituency associations since this Feb.

PS. Would it be cheeky of me to point out that one of the fund management houses that the Government now part owns voted in favour of Caledonia Investments funding the Tories this July?

Fun with Tory funding

There’s more dodgy Tory funding news this morning, linked to rubbish millionaire shadow chancellor George Osborne. He’s definitely the weak link in the Tory front bench and we ought to target him as a result. In the words of Admiral Ackbar: “Concentrate all fire on that super star destroyer!”

Inspired by Osborne’s claim to have merely been walking past when a possible £50k donation to the Tories was coincidentally discussed with a Russian oligarch (rather than actually “soliciting” it) or something, I thought I’d have another look at City outfits funding the Dark Side. As I’ve blogged several times before, there are a couple of investment businesses that are open Tory supporters.

First a quick update on the “generally non-partisan” fund manager Fidelity Investments, which has given the Tories half a million quid over the past few years. Fidelity just picked up a £250m global equities mandate from the Tory-controlled North Yorks pension fund. Anyone in touch with the Labour group up there might want to alert them to Fidelity’s donations in case they don’t already know about them.

The other outfit of note is investment trust Caledonia Investments, which has passed resolutions at its last two AGMs giving it authority to provide funding to the Tories. It passed these resolutions with the support of a number of fund managers. A quick search on the Electoral Commission register last night revealed that Caledonia’s donations are now starting to feed through to local Tory associations. Ealing Central and Action received £3000 earlier this year, whilst Milton Keynes and Sutton and Cheam got £5000 each. Anyone in touch with the CLPs in those areas might want to pass this info on.

I’ll keep posting the info as I get it. Next one to watch for is whether Fidelity gave the Tories anything in Q3 this year. They’ve given the Tories £60K so far this year.

Caledonia passes resolution to fund Tories

A quick update on this. Caledonia Investments had its AGM last and was seeking authority to spend £75,000 of shareholders' money on Tory campaigning in marginal seats. You can find the results of the AGM here (PDF), the resolution is number 17. The bottom line is that about 20% of votes did not support the resolution (about 16.5% of that being votes against, the rest abstentions). If you include the fact directors and the Cayzer Trust own 30% plus, that suggests that the actual level of independent shareholder opposition was higher.

But that means that there must be fund managers out there which actually voted in favour of partisan political donations. I think we can probably assume Fidelity are in that club, but who else? If you are a trustee of a pension fund with any more in Caledonia ask your manager how they voted.

It also appears that a few charities may have money in Caledonia - I wonder how this has gone down with them?

Sunday snippets

Just a few links that might be of interest. In The Observer a review of Richard Thaler's Nudge by the new director of Demos, which isn't bad.

Meanwhile in the business section there is a piece about Caledonia Investments trying to bung shareholders' money to the Tories, which I've mentioned before.

Finally I've stumbled across (via Technorati) an new Labour-supporting aggregator blog which is worth a look - Labour Matters.