LSE-listed infrastructure fund under shareholder fire

Infrastructure India Plc (IIP), an infrastructure fund listed on the London Stock Exchange (LSE), is under constant fire from its investor. Advance UK Trust, the IIP shareholder, has called for an emergency board meeting demanding the removal of the existing directors from the IIP board.

The move follows the activist stand taken by some of the shareholders in cases of Trikona Trinity Capital and Hiranandani-led Hirco, which is listed on LSE’s Alternative Investment Market (AIM) meant for smaller companies.

Advance UK, which holds a 10.1 per cent stake in IIP, has requisitioned a meeting to replace three board directors with its two nominees. “Advance UK believes the company is sub-scale with an overhead that is too large for a company of its size and needs to be expanded or sold to another infrastructure company with greater resources,” said Advance Trust UK in a statement to LSE in December.

The rift appeared after the IIP board did not consult its shareholders and investment advisors before lining up investments in transport and logistics sectors. IIP replied to the board meet call only after three months.

Since raising a fund through an initial public offer in 2008, IIP has so far made only two investments in India—Rs 110 crore in Shree Maheshwar Hydel Power Corporation in June 2008, and another Rs 96 crore for a 26 per cent stake in Western Madhya Pradesh Infrastructure and Toll Roads in August 2008.

Another trigger for the rising rift came from the replacement of Bloomsbury Asset Management Advisors (BAMA), the investment advisors to the fund, by Ankur Partners LLP. Advance UK wants IIP to reinstate BAMA.

Further, in a filing to LSE, Advance UK Trust said it would ‘wound up’ after its shareholder meet early next week.

The IIP management in a letter to the stakeholders said they had received responses from shareholders, representing 25 per cent of the voting rights, who would vote against Advance UK Trust’s resolution.