Scottish Mortgage rebuts former director’s barbs as boardroom bust-up continues
The Scottish Mortgage Investment Trust has rebutted fresh claims from its former director Amar Bhide after he filed a complaint with regulators claiming that the firm misled investors over his exit.
Bhide, who left the firm in a boardroom bust up in March after alleging that Scottish Mortgage’s directors lacked independence and should not be punting investors’ cash on private companies, has now claimed the trust gave a “highly incomplete” and “seriously misleading” account of his departure to the market.
The Trust nodded to the row in its results on the 17th May, saying it was about “a fundamental difference in view on the suitability of the company’s investment policy” towards private firms and “managing the discount/premium”.
However, The Times reported today that Bhide had launched a flurry of fresh allegations in a letter to regulators, suggesting that the trust misled shareholders over the main reasons for his departure.
“My dispute primarily started with and centered on the process for selecting and appointing the new directors. The [Scottish Mortgage] statement makes no mention of this at all,” he reportedly wrote in the letter.
Bhide claimed that his candidates to replace him on the board had also not been properly considered. However, City PM understands that two said no, two did not reply and one was quickly ruled out.
The firm has hit back at the suggestions and said today that “the board is entirely happy that they are in compliance with all their governance and disclosure obligations,” incoming chairman Justin Dowley said.
The scandal has unsettled the management of the investment trust after a bruising year in which it was rocked by the sharp sell-off in tech stocks. In its final year results earlier this month, the firm acknowledged it had been “painful for shareholders” after the trust plunged 33.5 per cent in value over the year.