I received an unhelpful response to a question today (19th May) from Eleco (ELCO). I have been a shareholder for some time in this construction software company. The company announced on the 26th of April that it had received a requisition notice that covered resolutions to reappoint two directors, that all directors stand for re-election at future AGMs and that the remuneration committee report be approved.
It was certainly unusual that such resolutions were not on the AGM agenda on the 6th of May and the above requisition was ignored (probably too late anyway). It is of course standard practice now for all directors of listed companies to stand for re-election, and a remuneration resolution is also normal at most AIM companies even if not legally required. The AGM was held in a format that discouraged questions also so I did not attend.
On the 14th May the company announced that the requisition notice had been rejected as it did not comply with the Companies Act and the company’s Articles, but gave no further information.
So I sent a question addressed to the Chairman, asking what was the reason for the requisition and exactly why was it rejected. The answer I received from advisor SECNewgate (not from the Chairman) was: “Thank you for your email regarding Eleco. It has been discussed with the Company’s NOMAD and lawyers and we do not believe we need to add any further detail other than that the requisition notice does not comply with the requirements of the Companies Act 2006 and is also contrary to the provisions of the Company’s Articles of Association”.
Hardly a helpful response. Why should the company avoid answering such simple questions? Will they continue to evade answering, which legally could be difficult at the next AGM? If they have one or more disgruntled shareholders who chose to submit the requisition why should not other shareholders know about their concerns? This is just bad corporate governance.
There were also large numbers of votes against some of the AGM resolutions which the company has not commented upon – all highly unusual.