Castle Alternative Invest AG (Symbol: CASN, CH0005092751): Information for Shareholders and the Media
Castle Alternative Invest confuses its shareholders
- A most unusual voting procedure regarding voting for the proposals submitted by FINEXT Fund Management to the Annual General Meeting of Castle Alternative Invest AG conducted on May 13th, 2014 resulted in significant voter confusion.
- Shareholders who wished to agree to the proposals of FINEXT were instructed at the Annual General Meeting to vote "No" while many shareholders who intended to vote in favor of the proposals through proxy cards voted "Yes".
- FINEXT requests shareholders to attend the Extraordinary General Meeting, to be held on July 18th, 2014, in order to correct the voting results of the Annual General Meeting.
- The FINEXT proposals seek to reduce the persistently high share discount to net asset value and thereby create value for all shareholders.
Castle Alternative Invest AG (CAI), an investment company managed by LGT Capital Partners that specializes in hedge fund investments, will conduct an Extraordinary General Meeting on July 18th, 2014. The meeting is scheduled as a result of a controversy related to the voting results on three agenda items proposed by FINEXT Fund Management (FINEXT) at the Annual General Meeting conducted on May 13th, 2014. FINEXT proposed:
1. The issuance of put-options to shareholders, which grants them the right to sell the stock to the company at a price corresponding to 95% of the last published net asset value (NAV).
2. Dissolving the legal reserves from capital contributions and making the maximum tax free distribution to shareholders.
3. A semi-annual vote on the dissolution and liquidation of the company during a general shareholders' meeting.
FINEXT believes that these proposals are the best way to reduce the persistently high share discount to NAV and thereby create value for all shareholders by returning capital to shareholders in a tax efficient manner and holding the board accountable to shareholders on a semi-annual basis. Since 2005, CAI shares have traded at a consistent discount to the underlying company NAV. Since 2008, the discount has always exceeded 20%, and currently continues to trade at the highest discount of its comparable peers. Despite this persistently high discount, the Board of Directors of CAI recommended shareholders reject the FINEXT proposals without providing any rationale or alternative solutions.
A most unusual voting procedure
A most unusual voting procedure resulted in confusion amongst shareholders during the recent Annual General Meeting. While shareholders who intended to vote for the FINEXT proposals through proxy cards believed they should check the "Yes" box next to each proposals, shareholders who attended the Annual General Meeting were instructed to vote "No" if they wanted to support these proposals. Consequently, many shareholders who were unable to attend the Annual General Meeting and had appointed an independent proxy mistakenly ended up voting against their own will.
As a result, there was only minimal support for the FINEXT proposals at the Annual General Meeting held on May 13th, 2014, during which 3,408,352 voting shares represented 25.5% of equity capital. Even CAI admitted that the voting procedure created 'room for a misunderstanding'.
Shareholders can still rectify the voting results
In order to achieve an ex-post sanctioning of the voting results, which arose in such a highly unusual way, CAI called an Extraordinary General Meeting of its shareholders on July 18th, 2014. Shareholders will be able to re-vote on the three FINEXT proposals during this meeting. However, the voting instructions are again unusual as the recommendations of the Board of Directors to reject the FINEXT proposals will be presented to the shareholders for voting and not the FINEXT proposals themselves.
FINEXT requests all shareholders to either attend the Extraordinary General Meeting and vote against the CAI Board of Directors' proposals to reject the FINEXT proposals, or instruct an independent proxy to vote against the proposals of the Board of Directors. In such a case, the check box 'AGAINST THE PROPOSAL OF THE BOARD' must be ticked on the shareholders' voting card provided by CAI.
FINEXT believes that LGT Capital Partners and the LGT Group should respect the principals of good corporate governance and that the shares represented directly or indirectly by LGT Group should not vote during the Extraordinary General Meeting to be held on July 18th, 2014, which will be exclusively for the re-voting of the FINXET proposals.
Contact details for media and the shareholders (on behalf of FINEXT Fund Management):
Dynamics Group AG, Utoquai 43, 8024 Zurich
Edwin van der Geest, Tel +41 43 268 32 30, vdg@dynamicsgroup.ch
Thomas Balmer, Tel +41 43 268 32 34, tba@dynamicsgroup.ch
About FINEXT Fund Management:
FINEXT Fund Management is a European investment manager focused on Value Investing. FINEXT Multi Asset Class Portfolio follows a global investment strategy and targets returns at a similar rate to equity markets, but at a lower volatility. The Company, characterized by a long-term investment horizon, has assets under management amounting to more than USD 150 Mio. FINEXT managed structures have been shareholders of Castle Alternative Invest AG for over five years.
