Richard Hesletine is fundamentally opposed to the forthcoming "unitisation" of OIT, forced upon the trust's managers by two New York based arbitrageurs.
Mr Heseltine declined to comment directly on his objections to the proposals, which are expected to be presented to shareholders "within days". On the subject of his resignation from OIT, he said: "Put it this way, it's nothing to do with ill-health, it's not to pursue other interests, it's not to spend more time with my family".
The two arbitrageurs - trading under the names Liverpool Limited Partnership and Westgate International Limited Partnership - bought a 15 per cent stake in OIT just before the company's December AGM.
The bulk of the shares were bought from the Liverpool and Victoria Friendly Society, which put its 14 per cent stake up for sale after the investment manager originally handling the trust was declared bankrupt and resigned. The arbitrageurs then used their voting rights to force a "discontinuation vote" through at the AGM.
Every year, OIT shareholders vote on whether to continue with the company. The process is usually a formality, but this year, the arbitrageurs managed to push through a "no" vote. As a result, the board of OIT will later this week suggest to shareholders that the company be converted to a unit trust. OIT is expected to be liquidated.
Since the AGM, the two arbitrageurs have increased their stake to 21 per cent. Other arbitrageurs, including Sierra Trading - which last year forced the liquidation of Kleinwort Benson's Overseas Investment Trust - and Tokkei Bank have also bought shares.
The probable conversion of OIT to a unit trust is part of a wider industry trend. Investment trusts - quoted companies which invest in stocks on behalf of their shareholders - have fallen out of favour in recent years.
This tailing-off in demand for investment trust shares has led to a widening "discount", or difference between the value of the shares in the investment trust and the net asset value of the shares - the value of the underlying investments.
More and more arbitrageurs have been seeking to exploit these widening discounts by buying up large stakes in investment trusts then demanding these companies convert into unit trusts. When the conversion process is complete, arbitrageurs can sell out, receive the net asset value of their shares, and make a tidy profit.
The two arbitrageurs who have forced the unitisation in OIT's case trade under a number of different names. For OIT, they have used the Liverpool Limited Partnership, based in Bermuda, and the Westgate International Limited Partnership, based in the Cayman Isles.
However, the two individuals, whose real name is believed to be Elliot, also go under the name of Stonnington.
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