Investors denied GAM top executives and directors a key approval following a whistleblowing scandal. The ex-star fund manager at the center of the scandal was shut out of the meeting.
The troubled Swiss asset manager's annual meeting derailed when just 49.43 percent of shareholders gave board and management their backing in a so-called discharge, at an annual meeting in Zurich. The vote effectively exempts managers from liability for their actions, and is normally waved through by shareholders.
The rebuke came after GAM's ex-bond fund star Tim Haywood was shut out of the meeting, held in Zurich. Haywood told finews.com he was barred, despite registering shares in order to participate.
GAM disputed this view, saying if Haywood had been included in the shareholder register, he would have been allowed to the shareholder meeting. Haywood told finews.com he would have voted against GAM’s 2018 report because he disagrees with the company’s representation of events leading up to his dismissal. GAM sacked Haywood in February for gross misconduct.
GAM Flags Asset Return
GAM Chairman Hugh Scott-Barrett acknowledged shareholder discontent. «We understand the decision of some shareholders in the context of the continuing liquidation of the ARBF fund,» he said immediately following the rebuke.
ARBF, or absolute return bond funds, is a billion-dollar asset business which Haywood managed until last July, when he was suspended after his co-fund manager blew the whistle on him. Scott-Barret said earlier on Wednesday that GAM expects to have sold off the remaining assets and returned between 99.6 and 101.0 percent of investors' money by mid-July.
Drawing a Line
The company wants the liquidation to draw a line under an 18-month investigation sparked by a whistleblower in 2017: it clinched a deal last month to sell all outstanding power purchase receivables notes. The instruments were what prompted the whistleblower to come forward, as finews.com reported exclusively in September.
Meanwhile, both whistleblower and Haywood have been let go by GAM, which is cutting jobs as part of 40 million Swiss francs ($39.3 million) in spending cuts this year. Haywood is appealing the decision.
«I Cannot Absolve Them»
He raised questions over the 18-month investigation into his behavior which has yet to conclude. «Like other shareholders, I’m afraid I cannot absolve them for their actions because I believe they are taking some incorrect actions. Particularly in regard to me they failed in their duty of care,» he told finews.com. «I have been deemed to have committed gross misconduct and I refute that wholeheartedly.»
GAM chairman Scott-Barrett (pictured below) defended the asset manager’s actions. «We’ve had to walk a fine line of actions and communications, but we do believe we have taken the right measures considering the circumstances,» he told shareholders.
GAM chairman Hugh Scott-Barrett
The whistleblowing has wrought havoc on GAM, which bled $21.5 billion in assets last year – clients left in droves after Haywood was suspended in July. «Looking at our numbers does not make easy reading,» emergency CEO David Jacob said. The company posted a net loss for the year, scrapped its dividend, and embarked on an aggressive cost-cutting program last year.
