Saturday, 30 May 2015

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.

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