ABI: Barclays placed on red top by IVIS

After further discussions with Barclays and with members, the ABI’s Institutional Voting Information Service (IVIS) has now placed a ‘red top’ on its report on the forthcoming capital-raising vote. The report had previously been held on an amber top pending these discussions.

Peter Montagnon, the ABI’s Director of Investment Affairs, said:

“We have been grateful for the opportunity to discuss the issues with Barclays and recognise the changes they have made to their proposal as well as the commitment of all the board to stand for re-election and of the executive directors to forgo bonuses this year.

“However, these changes cannot offset the concern of shareholders at the serious breach of the pre-emption principle, especially on an issue with a large discount. Other concerns include the preferential terms available to some investors, and the overall cost of the issue to existing shareholders. After careful consideration we therefore felt we had no choice but to proceed with a red top.

“For the sake of clarity, a red top does not constitute advice to vote against the proposals, but rather the presence of an issue of grave concern. Shareholders will have to weigh up all relevant factors, including the consequences of rejection for Barclays and the wider banking system. The Board should not therefore assume that votes in favour of the proposal constitute support for the way it has approached the issue. The red top establishes a firm basis of principle for further dialogue with Barclays and other companies in future.”

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