Betfair faces stormy AGM on investor concerns over governance
Investors in UK gambling group Betfair - which is headed by former Paddy Power executive Breon Corcoran - have been urged to vote against a raft of resolutions at the company's annual general meeting today amid concerns over corporate governance and pay.
Earlier this year Betfair admitted that it had been advised that it did not have sufficient distributable reserves to pay dividends in 2011, 2012 and 2013, or to engage in share buybacks.
The total amount of funds used amounted to £60m (€75.1m).
Prominent and influential UK shareholder watchdog PIRC noted the payments were illegal under company law and said shareholders should oppose the re-election of chairman Gerald Corbett.
"Aside from the seriousness of that breach of company law in itself, the description of events in the accounts raises more questions," added PIRC in a circular.
PIRC said that technical guidance was issued by the Institute of Chartered Accountants in England and Wales (ICAEW) in 2010 related to distributable profits and has questioned why Betfair continued to make illegal distributions in 2011, 2012 and 2013, "particularly as the mistake was not a once-off, but repeated".
PIRC said the whole validity of past Betfair AGMs has also been called into question.
"As the key source of information for shareholders at the AGM to exercise class rights the annual accounts have been defective," it added.
It has called or shareholders to oppose the adoption of the annual report.
It has also asked shareholders to vote against the remuneration policy. It said the chief executive pay is "not considered in line with the company's financial performance over the last five years". It said the total potential rewards for the CEO under all incentive schemes are considered excessive.