Shareholders have voted against proposals from Saba Capital Management at the first of seven investment trust general meetings where votes are taking place on changes proposed by the firm.

Saba had proposed replacing the independent board of directors at Herald Investment Trust, but around 65.1 per cent of shareholders voted against the resolutions.

As Saba used its share of votes to vote in favour, totalling approximately 34.75 per cent, just 0.15 per cent of other shareholders voted to support the proposals.

There was a voter turnout of around 80 per cent at the Herald general meeting.

The requisitioned general meeting at Herald was the first of seven that are subject to Saba’s resolutions, with the remaining six meetings taking place in the first half of February.

Association of Investment Companies (AIC) chief executive, Richard Stone, described the result as a “victory for shareholder democracy”.

“It’s very encouraging to see Herald shareholders turn out to vote in such numbers,” he continued.

“There are six other trusts with votes just around the corner. It’s vital that all shareholders vote on the future of their investment trust. Shareholders need to act now.”

The AIC previously wrote to the Financial Conduct Authority (FCA) expressing its concerns about the protection of shareholders’ interests following the action by Saba.

The FCA has since confirmed that it has written to the relevant platforms to understand how they have engaged with their customers on the Saba vote.

“We welcome this intervention by the FCA and their support for retail investors to engage with their investments,” Stone stated.

“But we need to remove the barriers which prevent retail investors voting. Voting must be straightforward and easy for everyone. Saba’s action has highlighted that this is critical if retail investors are to have a say on what happens to their investment trust.

“It’s reassuring that the FCA has reaffirmed their powers to investigate and take action if they see evidence of a breach of the Listing Rules.

“The FCA also stated that the Listing Rules aim to ensure investment trust boards can act independently from the manager.

“Investors must receive adequate information on the investment policy and the FCA and shareholders must approve any material changes to the company’s investment policy.”

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