IEM chair Glen Suarez (pictured) said the board made 'every effort to resolve this situation constructively'.
Following a requestioned general meeting today (17 June), the board of Impax Environmental Markets (IEM) has not been re-elected.
Chair Glen Suarez, as well as directors Aine Kelly, Stephanie Eastment, Guy Walker and Elizabeth Surkovic, received 71.2% of the total votes against their re-election and their tenures will cease immediately.
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The meeting, called for by Saba Capital, also installed Caroline Bault, Steven Grey, Jason Chen and Aaron Morris as the next directors of the trust, all of whom were nominated by Saba, with a similar percentage of votes as those cast against the incumbent board.
Share buybacks and the trust's renumeration policy were also blocked by shareholders at the meeting, which had a turnout of 44%.
Prior to the meeting, Suarez said that the board made "every effort to resolve this situation constructively" by offering shareholders a continuation tender offer at close to NAV, reliant on Saba's full participation.
"Regrettably, Saba refused to accept this unless conditions that were wholly unrealistic were met," he continued.
"As a result, we offered all shareholders the option of an exit tender offer at close to NAV, ensuring they had a choice to avoid being trapped against their will. Some 80.5% of non-Saba shareholders chose to exit the company. We are satisfied that we gave all shareholders the option of getting out at close to NAV.
"And here we are today, with the outcome unfolding exactly as the board anticipated. Saba, a single minority shareholder, has, effectively taken control of the company due to the peculiarities of the UK regulatory regime and UK company law," Suarez concluded.
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Boaz Weinstein, founder and chief investment officer of Saba, commented: "IEM shareholders delivered a resounding rejection of the status quo – not once, but twice. After 80.5% of non-Saba shareholders chose to exit in April, 71% of voting shares today chose to replace the incumbent directors with a new board. The message is simple: the underperformance cannot go on.
"Let me also correct the outgoing board's parting claim that we are ‘a single minority shareholder'. We are not. Saba represents millions of ordinary savers who hold IEM through their investments with us. And we bought our shares from the very IEM shareholders the incumbents claim to champion – shareholders who felt compelled to sell after years of disastrous performance."
Weinstein added that "shareholders finally have a board that will put their interests first" and now, they need a manager that will do the same.
IEM currently has £202.9m in assets and is trading at a 9.7% discount to NAV, according to data from the Association of Investment Companies (AIC).
At the time of reporting, IEM shares were down 0.2%, according to data from the London Stock Exchange.
Richard Stone, chief executive of the AIC, added: "This is the second time a minority shareholder has been able to set the direction of an investment trust against the wishes of the majority of other investors.
"We are expecting the FCA to announce a consultation on changes to the Listing Rules shortly. We are pressing for changes to address activism which benefits one shareholder by capturing the management contract."
Saba has been contacted for comment.
