The war of words between one of London’s largest landlords and a Hong Kong billionaire has escalated this morning in the run-up to an investor showdown set to take place tomorrow.
Samuel Tak Lee, who owns a 26 per cent holding worth £700m in West End property group Shaftesbury, has revealed today that he will vote against the reappointment of the property giant's directors in tomorrow’s Annual General Meeting (AGM).
The row revolves around a fundraising from Shaftesbury in December 2017, with Lee claiming that the board approached rival shareholder Norges Bank Investment Management more than a month prior to the capital raising, but only notified Lee on the morning of the announcement, leaving him hours to secure finance to acquire new shares and maintain his own stake.
Shaftesbury, which owns huge swathes of West End areas such as Carnaby Street and Chinatown, has denied any attempts to actively reduce Lee’s stake, saying that the fundraising was a necessary means of funding new property acquisitions and an alternative to taking on more debt.
In a statement today Shaftesbury said: "The company has fully addressed Mr Lee's questions about the December 2017 placing in extensive previous correspondence. The board acted entirely properly in undertaking the placing, which was conducted in accordance with authorities provided by shareholders to the Directors at the 2017 AGM and in compliance with all legal requirements.
"The board has always adopted, and will continue to adopt, the highest standards of corporate governance and takes its fiduciary duty to act in the best interests of all shareholders very seriously."
While Lee has repeatedly said he will block resolutions to allow the company to raise more cash through new share issues, today’s move is the first time the Hong Kong developer has said he will oppose the remuneration and reappointment of Shaftesbury’s chairman, chief executive and chief financial officer.
Although Lee’s attempt to deselect Shaftesbury’s directors is not expected to succeed, with the vote requiring 50 per cent to be blocked, the protest vote is likely to raise tensions ahead of the FTSE 250 group's AGM tomorrow.
Lee, whose Langham Estate company owns a large property portfolio neighbouring the one belonging to Shaftesbury, has also said he will block two other resolutions at tomorrow’s meeting, in an attempt to prevent Shaftesbury from raising more money for property acquisitions through issuing new shares.
A representative of Lee said: "There was no economic imperative for the  share placement, and there was, as the board had acknowledged in presenting its 2017 results to market analysts only a week before, no need to raise capital in that amount. In doing so, the board has caused significant damage to shareholder value".
Last week Shaftesbury hit back at the accusations, saying: "The board does not agree with the statements made and sentiments expressed by Mr Lee in the... statement to shareholders, but respects his right and stated intention to vote against certain resolutions being proposed at the forthcoming AGM."