The Institute of Directors (IoD) has slammed mining giant Glencore for its recent £1.6bn equity placing, saying that the firm’s “conduct falls short of what we would expect of a major global company”.
Oliver Parry, senior corporate governance adviser at the IoD, said that Glencore’s decision “appears to be in direct contravention of the rights of shareholders and goes against a pledge it made at its AGM in May”.
“It flies in the face of the shareholder pre-emption rights which are designed to protect investors in these exact circumstances and should worry anybody with an interest in upholding the highest standards of corporate governance at Britain’s biggest companies,” he added.
Parry’s comments came after two other trade bodies also criticised the mining giant for flouting shareholder rights.
The Investment Association and the National Association of Pension Funds said in a joint statement yesterday that shareholder pre-emption rights, which give existing shareholders the first refusal on any new share issue, were not applied. They said: “This sets a very damaging precedent for market practices.”