Rebel investors demand change of board at SGI
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Your support makes all the difference.STAFFAN GADD, a former chairman and chief executive of Samuel Montagu, the merchant bank, is embroiled in a battle with shareholders of SG Investments, a financial services and investment company that he heads.
Last week a group of investors, who hold more then half of the 1.5 million preferred ordinary shares that are quoted on the Luxembourg Stock Exchange, requisitioned an extraordinary general meeting to elect a new board at SGI.
In a letter to shareholders, the group leading the revolt says that it 'is not not happy with the performance of SGI and wishes to make changes in its governance and direction. Furthermore, the consortium believes that SGI's existing board of directors is not sufficiently representative of its shareholders.'
SGI's investment portfolio includes a 35 per cent shareholding in Citigate, the public relations company whose clients include the Lloyd's insurance market.
The consortium leading the revolt includes SAF, the Swedish employers federation, Sirius, the reinsurance company, which is part of Asea Brown Bouveri, and WASA, the Swedish insurance company.
In its letter, the consortium takes the view that SGI's results 'can only be described as disappointing. Investors subscribed for shares in 1987 at a price of pounds 11 a share. Since then SGI has paid no dividends, and at the end of 1991 its book value was only pounds 4.35 a share. This represents a 60 per cent loss in value. SGI's shares are currently quoted . . . at pounds 1.50p a share in an extremely thin market.'
The consortium is unhappy with the state of administration at SGI, accusing it of poor disclosure and inadequate management, and with its level of expenses.
'SGI has invested in a collection of unrelated businesses, ranging from pawnbroking and secretarial agencies to stockbroking and public relations, and most of these appear to have performed poorly,' says the consortium.
Mr Gadd, 58, has told shareholders that the aim of the consortium is to liquidate the company's assets as soon as possible with a view to returning funds to the shareholders it represents.
For the six months ending in June, SGI reported a loss of pounds 173,434.
The extraordinary general meeting is scheduled for 27 October in Luxembourg.
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