By McPherse Thompson, Assistant Financial News EditorINSTITUTIONAL INVESTORS in the Capital Growth Fund of the Jamaica Unit Trust Services, have rejected a proposal that would allow the Fund's managers to pay a fraction of encashments of more than $5 million in cash and the remainder in other investment instruments.
At a meeting of unit holders at the Terra Nova Hotel in St. Andrew last week, the investors expressed concern about the resolution and voted almost unanimously against it.
According to the results, almost 42.7 million of the 47.9 million units that were represented voted against the resolution, while 5.2 million voted in favour.
Anton Thompson, acting managing director of the Jamaica Unit Trust Services, told Wednesday Business that as a result of the vote, the board would be seeking to further explain the rationale for the resolution and negotiate with those unit holders with a view to having another meeting to have it passed.
"The board will now have to explain to them why it's absolutely necessary to have the resolution passed," Mr. Thompson said.
He said the resolution, which called for an amendment to the trust deed of the Capital Growth Fund, was reasonable. However, the institutional investors, in whose hands the Fund is largely concentrated, had indicated even before the meeting that they had a problem with the proposed amendment.
Jamaica Unit Trust Services had proposed the amendments to the trust deed as part of a review of the administrative procedures of the organisation, with a view to simplifying systems, making its management more effective, and enhancing liquidity.
On the same day, unit holders in the Capital Growth Fund rejected the amendment to the trust deed and a 10 a.m. meeting scheduled at the same venue for holders of the Jamaica Unit Trust Income and Growth Fund was not held.
The Trust said the meeting could not be convened due to lack of a quorum and will be scheduled for a new date. The quorum required for the meeting was 33.3 per cent of the units. There are about 40 million units of the Income and Growth Fund in issue.
Those unit holders are being asked to pass a resolution to remove all differences between accumulation units and income units, each unit to be equal to one undivided share in the fund. And net income from the fund is no longer to distributed as income to holders of income units or accrued as units allocated to holders of accumulation units, but added to the capital of the fund and reflected in the value of all units.
At the meeting of the Giltedge Fund, also convened at the same venue on the same day, some 76.6 million of the 76.9 million units who were represented, voted in favour of changes to that Fund's trust deed.
Unit holders were asked to support a resolution to formally cease the issue of new units (bonus units) as a result of additions to the capital of the trust.
Unit holders are empowered to authorise modifications, alterations and additions to the trust deeds by way of extraordinary resolutions passed by at least 75 per cent of the votes cast at a duly convened meeting.
