Why the motions at the Lincoln City EGM will probably fail

*I’m pretty apathetic towards the issue in general, this article has nothing to do with whether I think the motions should be approved, simply an explanation of why, mathematically, they probably won’t be*

I obtained the latest Annual Return for Lincoln City Football Club Company Limited using the excellent WebCHeck service operated by Companies House. Part of this is a complete list of shareholders in the club, in total there are 4,221,334 ordinary shares owned by ≈1,300 shareholders (I’m not going to count the exact number). I’m of the understanding that these are classed as ‘ordinary motions’* meaning a simple majority is required (votes representing >50% of the shares) for them to be passed but I’d welcome clarification on this.

From this I’ve been able to split the shareholders into groups. The current members of the board (which comprises of B Dorrian, R Bates, D Beck, K Cooke, J Foster, D Leonard, J Powell & S Tindall) & their associated companies (Lindum Group Limited and Lincolnshire Co-operative) own a total of 760,523 shares, or an 18.0% share in the football club. These shares are obviously going to be used to keep the Directors in their position

Lincoln City Supporters Trust is the single largest shareholder, owning 25.4% of the shares. Given the situation the Supporters Trust find themselves in (with two members representing it’s interests at board of directors) I doubt that there’s a big motivation to challenge the leadership at this time. (I might be proved wrong – the details of lasts nights’ board meeting have yet to be released)

And herein lies the problem for those attempting to oust the board**. Add the shares owned by the Directors to those owned by the Supporters Trust and 43.4% have been accounted for***. Of the remaining 56.6% owned by others (including the dissenters), 90% would have to vote for a motion for it to pass.

This would require the 60 largest shareholders to all attend the EGM and vote the same way and that’s highly improbable.

*I’ve come to this conclusion because the Companies Act 2006 states in Part 13, Chapter 1, Section 283, 6, a that

the resolution is not a special resolution unless the notice of the meeting included the text of the resolution and specified the intention to propose the resolution as a special resolution

From reading a transcript of the letters sent to shareholders I’m pretty sure that this clause wasn’t fulfilled, thus the resolutions are classed as ordinary resolutions (requiring a simple majority).

**A quick note to Bob Dorrian, requisitioners isn’t a real word, you’ve made that up

***If I add in the shares owned by associated directors this figure rises further still, to 50.5%, making a majority dissent impossible. I have no insight as to which way there would vote though


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s