After a long spell of deafening silence, City of London has finally responded in a very feeble attempt, with their reasons for opposing Resolution 4 just days before icapital.biz Berhad’s Adjourned 10th AGM to be held on 30th November. The letter, dated 24 November 2014, addressed to Tan Teng Boo and cc’ed to the Malaysian press (but only The Sun got it), was signed by someone on behalf of Oliver Marschner, a portfolio manager of City of London Investment Management but based in Singapore. Why didn’t they send this letter to the Board of Directors, Bursa Malaysia, and all the 3,400 share owners?

In a media conference on 17th November, in his capacity as a share owner of the close-ended fund, Tan Teng Boo had called on the foreign fund to attend the adjourned AGM and share with all share owners its reasons for opposing the re-election of a director of icapital.biz Berhad. Teng Boo explained that although it is not legally required, the foreign fund has a moral duty to explain its actions to the other 3,400 share owners, the real majority owners, of the fund. Instead of accepting the invitation and clarifying their reasons to the share owners at the adjourned AGM, City of London chose to express their views through statements to only some sections of the media.

Teng Boo’s views were supported by a strong message from the CEO of Minority Shareholder Watchdog Group who emphasized that best practices encourage shareholders, especially institutional shareholders, to explain their reasons for opposing a Director’s re-appointments, especially independent directors.

City of London’s letter referred to its Statement on Corporate Governance and Voting Policy for Close-End Funds, which states that “Requisite experience and understanding of CEFs is more relevant than knowledge of the country or region in which the Fund invests.” Being the only listed closed-end fund in Malaysia, it is only logical that NONE of the directors of icapital.biz Berhad have requisite experience and understanding of closed-end funds. Why is there a targeted attempt made by the foreign fund to single out a particular director? What are City of London’s ulterior motives? Divide and rule, like Britain did all over the world in the past?

City of London goes on to say that “Directors should not start a new term in office if they have been retired from active employment for more than 5 years.” One must question the definition of “active employment”. What does it mean exactly? It must be brought to share owners’ attention that Tunku Aziz is the current President of the Malaysian Anti-Corruption Foundation and has been a director of icapital.biz Berhad since 2011.

Teng Boo is very disappointed with the patronizing attitude displayed by the City of London. Share owners are still not able to make an informed decision as the reasons given by City of London are inadequate, baseless and utterly weak. The fact that the letter was addressed to Tan Teng Boo and not to the share owners or Bursa or Board, clearly shows that the foreign fund never had the intention to clarify their position to all share owners of the fund. It is ironic, given City of London’s supposedly emphasis on Corporate Governance that they have failed to practice what they preach.

To Tan Teng Boo, the Asian values of integrity, independence and intelligence are the most important. The letter by City of London is a clear testament of the foreign fund’s lack of integrity. By giving such superficial reasons for the opposition of Resolution 4, the foreign fund makes a mockery out of the other 3,400 share owners.

Tan Teng Boo sincerely calls upon the City of London to urgently revise and substantially improve their standards of corporate governance. Share owners are still not able to make an informed decision. Over the past two weeks, Teng Boo has held roadshows across Malaysia and Singapore to educate fellow share owners on long term investing and his analysis of current economic and market scenarios. All costs involved in the roadshows were borne by Capital Dynamics with absolutely no cost whatsoever to icapital.biz Berhad.

Attached is the letter from City of London Investment Management sent to Tan Teng Boo.