Investors in Caledonia Investments (CLDN ) have signalled their concern over the suggested creeping control of the Cayzer family which holds 49% of the £2.9bn listed global fund.

At each annual general meeting since 2010, company data shows, shareholders voted to waive rule nine of the Takeover Code, meaning the Cayzers would not have to bid for the trust, despite their stake being well past the 30% stake threshold.

This allows the board to continue to buy back shares, shrinking the overall pot. 

However, at an AGM in July, 35% of voting shareholders who held 3.7m shares, voted against the waiver. This included a large shareholder who had previously supported the resolution adopting a policy of voting in line with the proxy voting advisor’s recommendation, a stock exchange notice said.

The proxy adviser is generally not supportive of such rule nine waiver resolutions given their potential to lead to creeping control. 

‘In response to the feedback received from this shareholder, who continues to be supportive of management, the company continues to engage with this proxy voting adviser,’ wrote chair David Stewart in the notice.

‘We recognise the concern raised by the proxy voting advisor. However, the directors believe that CLDN’s ability to exercise the authority to make market purchases of its own shares warranted approval of the rule nine waiver resolution.’

Of the shareholders, 6.7m, or 65%, supported waiving the resolution, while 10.6m shares did not vote. The Cayzer family cannot participate.

The largest shareholders after the family are bargain hunters 1607 Capital Partners and Allspring Investments, which have respective positions of 4.3% and 3%, according to Refinitiv data. 

Data going back to 2010 shows more than 20% of voting shareholders were against waiving the resolution before, in line with proxy adviser recommendations, but this marks the first time since the new corporate governance codes were established in 2018 that it has gone above the threshold at which the board needed to consult shareholders.

Shares in the global equity trust closed on Friday at £34.40, a 34% discount to the unaudited net asset value of £51.80 as at the end of December.

On Friday the company announced it had completed the sale of Seven Investment Management (7IM) generating final cash proceeds of £256m, significantly above the book cost of £119mm, calculated by Numis analyst Gavin Trodd. 

Trodd said Caledonia is ‘perennially cheap’ given the family’s large stake, which ‘limits liquidity and the ability to manage the discount’. 

‘Nevertheless we believe the downside to the discount is limited and therefore the company is well placed to deliver and attractive share price returns,’ he commented.