Shareholders at a Cheshire company have staged a revolt against plans to allow directors to dilute their stakes without their approval.
Wilmslow-based hydraulics business Flowtech Fluidpower had been seeking approval at its AGM to allow its directors to allot shares in the company without first offering them to existing shareholders on a pro-rata basis.
The main function of pre-emption rights is to help protect a shareholders' proportion of voting and other rights in a company from being diluted without their consent.
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At the company's AGM, which was held earlier today (June 13), almost 30% of shareholders voted against the plans. The result means the resolution 12 proposals were not passed.
The same percentage of shareholders also voted against resolution 11, which sought to unconditionally authorise the directors to issue shares in the company. However, that resolution was passed.
A company statement said: "All resolutions, with the exception of resolution 12 (a special resolution for the disapplication of pre-emption rights), as set out in the notice of meeting dated 19 May 2023, were duly passed.
"The company also recognises that a large proportion of the votes were cast against resolution 11 (an ordinary resolution to give authority to allot shares).
"Although resolutions 11 and 12 were in line with the investment association's share capital management guidelines, the board takes seriously its responsibilities to maintain a healthy dialogue with shareholders and will engage with them to better understand their views."
Flowtech Fluidpower's largest shareholder is Odyssean Investment Trust while other major backers include Harwood Capital, Downing LLP and Gresham House Asset Managemeny.
In April, Flowtech Fluidpower revealed its turnover had increased by over 5% to £114.8m in 2022 but that it had also slipped to a pre-tax loss of £5.5m.
It also revealed it had been gradually reducing its headcounts by 10% over recent months.
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