West Somerset Railway - Removal of the PLC Chairman and related matters

Not quite a veto -the number of votes they have at a general meeting is the number of shares they own.

 

That’s impossible. The plc cannot ‘use’ the WSRA’s shares. Like any other plc shareholder the WSRA can use their votes at a general meeting as they see fit.

 

Please can you explain to us all the effect of this power to allocate WSR plc shares by the WSRplc board without reference to exsisting shareholders could have?

How would it help the WSR and its many stakeholders??

Layman's terms please!!

Jeff Price

 

Collective Responsibility

and yes now that you have pointed it out it could have two meanings but the original thought was positive!

 

Mike, perhaps you would be kind enough to write something that answers the questions raised and publish it on the Association website so everyone can see it. Maybe you could start by listing the achievements thus far against the recommendations of the Coombs Report.

 

Not only Railways!!

 

Your document cannot be read Steven, is there a reason?

 

The technology of the Companies House website means that the link is one time. Having found the document, I read it to suggest that the board can issue new shares at their discretion, and do not have to consider the interests of existing shareholders when doing so.

At the most benign, that could allow a new major investor to put money in without the plc having to go through the process of asking existing shareholders if they want to increase their holdings to retain their share of the company (and voting rights). Politically, I can imagine it could be used to dilute the potency of the WSRA resolution. However, I can imagine circumstances where the powers could be used less desirably, and to the detriment of the railway.


Sent from my iPad using Tapatalk

 

This is interesting

Date (document was filed at Companies House) Description (of the document filed at Companies House) View / Download (PDF file, link opens in new window)
27 Jul 2018 Appointment of Mr Paul William Conibeare as a director on 21 July 2018
View PDF Appointment of Mr Paul William Conibeare as a director on 21 July 2018 - link opens in a new window - 2 pages (2 pages)
27 Jul 2018 Termination of appointment of Paul William Conibeare as a director on 23 June 2018
View PDF Termination of appointment of Paul William Conibeare as a director on 23 June 2018 - link opens in a new window - 1 page (1 page)

I wonder what the background is to Paul William's Conibeare's Resignation and Reinstatement?

So Frank Courtney is not the only one!

 

There is nothing sinister here, it is the result of a procedural matter at the WSRplc AGM when a poll vote was correctly called but not actioned.

But keep looking..........

Jeff

 

Hopefully, this works.

Steven

 

Is this that unusual?

The AGM of SVR Holdings plc passes a similar resolution every year - although the numbers are rather larger - £14m rather than £3.5m.

 

I will try!

1. Normally, Company Law requires that existing Shareholders approve and have chance to buy any new shares being issues. This is to protect them - if you own 10% of 100,000 shares and the Company issues another 100,000 shares, then you only own 5% of the Company instead of the 10% you did own.
2. Particularly when a Share Issue is planned, the Company (by simple majority of those voting) can approve an increase in the maximum number of shares that can be issued (the Authorised Share Capital) and can also authorise the Directors to issue (allot) those shares at the Directors' discretion. This power cannot be open ended and so is renewed from time to time.
3. The Directors would still have to first offer any new shares to the existing members unless authorised by a 75% vote of Shareholder voting that they don't have to do so - the 'Disapplication of Pre-emption Rights'.

This resolution gives the Board for 4 or 5 years (it says 5 but states it expires in 4 so that could be interesting) to do 2 and 3. It may be a simple renewal of a previous resolution although I haven't found that on Companies House yet. As @michaelh says, it is not an unusual power for the Directors of a plc to have, and is indeed essential where there is an active Share Issue (as is the case at the SVR).

Hence, if the WSRplc needs an injection of cash, the WSRplc Board could issue additional shares up to the total Authorised Share Capital of £3.5 million (about a further £1.24 million) without reference to existing shareholders.

Now, saying that somebody would put over £1.2 million into WSRplc is very much entering the area of theory and I am sure some would say fantasy. I don't think such a thing has ever directly happened on a UK preserved railway. However, if it did, the consequences for other shareholders would be as follows. Assuming these shares were all issued to one Shareholder (or a group of investors working together), then they would then hold 35% of the issued shares (plus any they already might own, of course), the WSRA's current 9.5% would become 6.25%, the WSSRT 6% (?) just under 4% and anyone holding 35% would almost certainly have a majority of shares in any vote (the 50% for an Ordinary Resolution and 75% for a Special Resolution are majorities of those voting, which for a plc is usually not all Shareholders) and probably be able to pass Special Resolutions (If the next 2 largest shareholders clubbed together, they would still need all other votes to be with them and attract another 1.5% or so of overall Shares or over £50,000 of shares to block a Special Resolution).

So, obviously the cash injection would help the WSRplc deal with the challenges facing it. Hence, this could be said to help its existing, many shareholders and I suspect most would be happy, but the influence they enjoy, mainly collectively, would be diluted and it would be difficult not to see the holder(s) of 35% having effective control.

But, of course, that assumes somebody would put £1.2 million into the WSRplc.! I am sure each of us might make our own, probably differing, judgement as to how likely that is!

Steven

 

In this situation do the shares have to be issued at face value or can they be discounted thus lowering the £1.2 million requirement?

 

I'll tell you what, once the operating season has finished I'll write an article, probably in co-operation with my fellow trustees, for the Journal. I'll make sure we focus in on the Coombes recommendations. BTW we still talk regularly with Robin Coombes to get his perspective on things. Particularly now he's academically engaged on a thesis which focusses on Heritage Railways.

 

Great Idea Mike!

 

Just to stop any untoward hares running, the resolutions passed at the June 2018 AGM were renewals of previous resolutions. We continue to issue shares to general wellwishers and we needed to increase the headroom to do that. These clauses are completely normal and nothing underhand is taking place!

Ian Coleby

 

I understand that shares can be discounted but only if the offer is available to all.

Ian Coleby

 

Totally positive! I have shown time and time again that I am someone who believes in collaboration, compromise and working together. Sometimes this can get me in to trouble! However, as a board we will work together to resolve our current challenges.
Ian Coleby

 

I understand what you are saying and you are right, strictly speaking. But the intent of the WSRA resolution seems to me to be to make a stand and say: we have the right to remove any director we want to, if we have fallen out with them.