30 Jul 2014

Company 'not bound by resolution'

2:23 pm on 30 July 2014

Motor Trade Finances says even if shareholders support a number of resolutions being put by a group of dissident shareholders, its board and management won't consider themselves bound by the votes.

The company will hold a meeting on 13 August to vote on the resolutions, which relate to legal action the company is facing over the fees it charges.

The shareholders are wanting the company to provide more information about the potential liability it may be facing.

Chairman Stephen Higgs said resolutions from the shareholders owning more than 8 percent of the company indicate dissatisfaction with the way the firm has handled the litigation.

The board is urging shareholders to vote against the resolutions.

Mr Higgs said the Companies Act charges the board with the management of the company.

"We felt it appropriate to point out to shareholders that resolutions of this type aren't binding on management. That's not to say we wouldn't have considerable regard for the resolutions and act on them if they were passed."

One of the shareholders who called the meeting, Doug Rushbrooke, says it would take a brave board to ignore the will of shareholders.

"No doubt it's still possible to ignore it but it wouldn't seem particularly democratic."