An EGM (Extraordinary General Meeting) was held within F & C Asset Management where two of it's current directors where voted out of office by a seize of chairmanship bid by US investor Edward Bramson.
Mr Bramson criticised recent acquisitions made by F & C which suggests that he (Mr Bramson) has favourable future plans for the organisation hence the EGM and his victory over previous chairman Nick MacAndrew. This is obviously a movement instigated by the board but shareholders being the owners implemented the actual changes i.e. exercising the shareholder strength.
With the second largest shareholder of F & C, Eureko, showing allegiance to the the outgoing chairmans regime, a misunderstanding may occur if they decide to exercise their shareholder rights by selling their shares as oppose to intervening. This will cause a huge backdrop in share prices for F & C which will make it a lot harder to generate funds. Also, it leaves the organisation open to a threat of merger or even a takeover by other set of managers who would want to benefit from the price drop.
The likeliness of this sort is inevitable especially when Mr Bramson has never taken up a fund manager position and the Financial Service Authority has previously questioned the fund management of the newly appointed directors. Although Mr Bramson won the vote for chairman over Nick MacAndrew who was Eurekos' candidate, Mr Bramsons' argues that the acquisitions made in the previous administration has affected the performance of F & Cs' shares therefore with positive improvements in shareholder wealth, Eureko will be left with no option but to switch its' allegiance to Mr Bramson as it's no myth that all shareholders are after the enhancement and improvement of their investment.
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