Perpetual threatens legal action over documents blunder

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The Independent Online

The hostile bid gripping the normally sleepy investment trust sector took another twist yesterday when the board of Perpetual Income and Growth threatened legal action against its takeover target, Securities Trust of Scotland (STS), over bungled paperwork relating to its offer.

The hostile bid gripping the normally sleepy investment trust sector took another twist yesterday when the board of Perpetual Income and Growth threatened legal action against its takeover target, Securities Trust of Scotland (STS), over bungled paperwork relating to its offer.

The Perpetual trust, managed by Invesco, complained of a delay suffered by 3,500-4,000 shareholders in STS who had not received the relevant documents about its bid a week after publication of its offer document. All were members of saving schemes administered by Martin Currie, the independent Edinburgh-based fund manager which manages the STS fund.

A letter from the Perpetual trust's board to the board of STS, made public yesterday, said: "Whilst the specific failings may be susceptible of being remedied, of greater concern to us is the belief that Martin Currie may have been attributing responsibility to Perpetual Income and Growth rather than accepting its own failings in this regard to the detriment of Perpetual Income and Growth and the offer. As such we must express our grave concerns and formally reserve our rights against you and or Martin Currie."

The letter said the 500-or-so shareholders who had received documents had not been sent forms allowing them to accept the offer. "We remain unconvinced that appropriate documentation has been sent to scheme participants, effectively disenfranchising them."

A spokesman for Martin Currie said: "The position in our view is very straightforward. There was a small misunderstanding. The long and the short of it is that now everyone has a form of acceptance. As to who's fault it was, that remains undecided. Only 554 letters were sent without the form of acceptance. When we realised that we stopped the mailing."

Invesco believes there will be more consolidation among investment trustsas boards are held to account for poor performance by their fund managers.

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