Barclays board faces down shareholder outrage

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The Independent Online

Barclays faced investor uproar yesterday as shareholders attacked the board for leaving them no choice but to support the bank's controversial £7bn capital-raising plan.

Several small shareholders at a special meeting in London accused Marcus Agius, the bank's chairman, and John Varley, the chief executive, of riding roughshod over individual investors' interests in order to secure funding from the governments of Abu Dhabi and Qatar. A number of them called on members of the board to resign. "I feel like we've all been invited to a game of Russian roulette. The only difference is that all the chambers are loaded," Trevor White, a private shareholder since 1962, said.

The dissenters were backed by George Dallas, director of corporate governance at F&C Investments. Mr Dallas said F&C had reluctantly voted for the capital raising, but attacked it as a "clear and egregious infringement of pre-emption rights". Shareholders at the 200-strong gathering were still clamouring to ask questions when Mr Agius wound up the two-hour meeting, and one was restrained by security guards as he approached the stage.

A resolution overriding existing shareholders' rights to be allotted stock according to their holdings required 75 per cent of votes cast, and received 86.9 per cent. Three other measures got more than 85 per cent, but all suffered large abstentions of more than 500 million shares.

The capital raising will leave Abu Dhabi and Qatar owning more than 30 per cent of Barclays, while massively diluting existing shareholders. The bank is raising the cash to comply with the Government's demands for greater capital in the UK banking system.

Mr Varley said Barclays was right not to take up the Government's offer of new capital, because it would have restricted the bank's allocation of funds between its international businesses and the UK – where the Government wants banks to maintain lending.

Mr Agius said Barclays had faced a potential "death spiral" of a tumbling share price and depositor withdrawals.