Articles of Association - Minority Shareholders

[Woodstock Jag]

It is completely normal for micro-shareholdings not to be entitled to director representation. This is the case both with limited companies generally and with fan owned football clubs specifically.

St Mirren, like Partick Thistle, has hundreds of micro-shareholders. Their micro-shareholders actually make up over 20% of their issued share capital.

Those micro-shareholders have zero representation on the St Mirren Club board. The only people with powers of appointment of directors are the fan ownership vehicle (SMISA) and the minority investor that facilitated the sustainable fan ownership partnership (Kibble).

If Environmental Air Conditioning Limited (holder of less than 0.15% of the voting share capital in the football club) want to have a whip round to get the support of 200+ other shareholders and to raise the matter of their non-representation on the Club Board at the AGM they are free to do so.

To the rest of the Thistle support, and indeed the other shareholders, I suppose my message would be that there’s a much easier way to influence who goes on the Club Board and that’s to get involved with the fan ownership vehicle through its democratically elected corporate trustees.

[Woodstock Jag]

For now, Companies House has now published the new Articles of Association, and the associated documentation connected with the issuing of preference shares.

This public domain information will demonstrate that everything disclosed by TJF and the Trustees in recent days about the new Articles, and indeed the previous ones, is completely accurate.

For those interested, the old Articles can be accessed by scrolling back on Companies House to October 2011, when they were adopted.

[Jordanhill Jag]

53 minutes ago, Woodstock Jag said:

It is completely normal for micro-shareholdings not to be entitled to director representation. This is the case both with limited companies generally and with fan owned football clubs specifically.

St Mirren, like Partick Thistle, has hundreds of micro-shareholders. Their micro-shareholders actually make up over 20% of their issued share capital.

Those micro-shareholders have zero representation on the St Mirren Club board. The only people with powers of appointment of directors are the fan ownership vehicle (SMISA) and the minority investor that facilitated the sustainable fan ownership partnership (Kibble).

If Environmental Air Conditioning Limited (holder of less than 0.15% of the voting share capital in the football club) want to have a whip round to get the support of 200+ other shareholders and to raise the matter of their non-representation on the Club Board at the AGM they are free to do so.

To the rest of the Thistle support, and indeed the other shareholders, I suppose my message would be that there’s a much easier way to influence who goes on the Club Board and that’s to get involved with the fan ownership vehicle through its democratically elected corporate trustees.

So what your stating is that those who own a minority shareholding shouldn't bother or words to that effect -and put our “ trust “ in the myriad of “ Trusts “ two of which dont hold elections but get to nominate Trustees plus Directors -but thats OK 

you are missing the point completely- if organisations like the Jags Trust are entitled to representation - why not those who put in there hard earned cash

As for my own 0.15% - I had just started out in Business - had a Young Family to support - but when the Club asked for support I scraped together £2000 and gave it willingly

Over the Years Ive put in a Six Figure Sum into the Club and committed many hours to it - I asked for nothing in return 

The Board need as wide a representation as possible on it - If those who put there cash in ( however small) are not worthy as a voice - it speaks volumes of the New Outlook at PTFC 

 

 

[Woodstock Jag]

Just now, Jordanhill Jag said:

So what your stating is that those who own a minority shareholding shouldn't bother or words to that effect

No, not at all. I'm simply pointing out that the nature of their influence isn't, and never has been, through the boardroom. That isn't how private companies limited by share capital work. It's never been how they work.

The influence of micro-shareholders is through the legal protections provided by company law. Always has been. Always will be. Nothing has changed in that respect.

Just now, Jordanhill Jag said:

-and put our “ trust “ in the myriad of “ Trusts “ two of which dont hold elections but get to nominate Trustees plus Directors -but thats OK 

The whole point of the corporate trustee model is that, at the appropriate time, the individual trustees will step away and the PTFC Trust will be entirely controlled by democratically elected fan ownership groups.

TJF has run two sets of elections in the last 18 months. It has a vibrant membership of over 1650 members. The turnout at its last election exceeded two-thirds of the eligible electorate. Every single TJF member is eligible to stand for election, and to become part of the leadership group. Many have done so, and put themselves up to the scrutiny of their fellow fans.

The Jags Trust is obviously a much smaller organisation, but its constitution is a democratic one that requires elections to be held. It was precisely in the interests of bringing the fans together that the Working Group at the turn of the year recommended that they should be part of the revised fan ownership model. To demonstrate that this was not some TJF coup-d'etat but the arrival at a consensus between groups acting on behalf of the widest possible base of Thistle fans.

Just now, Jordanhill Jag said:

you are missing the point completely- if organisations like the Jags Trust are entitled to representation - why not those who put in there hard earned cash

The Jags Trust isn't represented on the Club Board Jim! It is one of four trustees that look after the fan ownership vehicle under company law on behalf of the beneficiaries.

Just now, Jordanhill Jag said:

As for my own 0.15% - I had just started out in Business - had a Young Family to support - but when the Club asked for support I scraped together £2000 and gave it willingly

And that was a very worthy thing to do. It doesn't mean that you should be getting a seat on the Club Board though Jim.

Just now, Jordanhill Jag said:

Over the Years Ive put in a Six Figure Sum into the Club and committed many hours to it - I asked for nothing in return

Again, that's a very worthy thing for you to do. But it doesn't mean you should get a seat on the Club Board!

Just now, Jordanhill Jag said:

The Board need as wide a representation as possible on it - If those who put there cash in ( however small) are not worthy as a voice - it speaks volumes of the New Outlook at PTFC 

This was done historically for micro-shareholdings. There was never any expectation in the 1990s that these share purchases would give those shareholders any meaningful say over the composition of the Club Board. Micro-shareholdings were, by and large, symbolic momentos for individuals who wanted to support their Club in a time of need.

Unlike (say) the historic investments of people like David Beattie, or Billy Allan, or Colin Weir, these were not big-ticket strategic investments into the football club, done with a view to getting a seat at the table to strengthen and influence the sustainability of the Football Club.

[Lenziejag]

I am finding it a bit bemusing that TJF or at least WJ is arguing the establishment position of boards. Here was me thinking that their idea was to try to find a way to include all supporters in this Fan ownership thing. 

[scotty]

12 hours ago, Jordanhill Jag said:

So what your stating is that those who own a minority shareholding shouldn't bother or words to that effect -and put our “ trust “ in the myriad of “ Trusts “ two of which dont hold elections but get to nominate Trustees plus Directors -but thats OK 

you are missing the point completely- if organisations like the Jags Trust are entitled to representation - why not those who put in there hard earned cash

As for my own 0.15% - I had just started out in Business - had a Young Family to support - but when the Club asked for support I scraped together £2000 and gave it willingly

Over the Years Ive put in a Six Figure Sum into the Club and committed many hours to it - I asked for nothing in return 

The Board need as wide a representation as possible on it - If those who put there cash in ( however small) are not worthy as a voice - it speaks volumes of the New Outlook at PTFC 

 

 

I guess the answer to that is that you all get together, form a Trust to which you all donate or sell your shares then you'd have a bit more say than The Jags Trust.

[stolenscone]

2 hours ago, Lenziejag said:

I am finding it a bit bemusing that TJF or at least WJ is arguing the establishment position of boards. Here was me thinking that their idea was to try to find a way to include all supporters in this Fan ownership thing. 

Hi LJ - isn't that what TJF is supposed to achieve though? It feels more democratic to have all supporters to have their say via the fan vehicle (which in turn is the trustee that nominates the club director) whan it would be to say that a single minority shareholder nominates a director.  

Maybe just me, but the model doesn't feel terribly "establishment" to my mind.

Edited October 15, 2023 by stolenscone

[Very Bitter Jag]

2 hours ago, Lenziejag said:

Here was me thinking that their idea was to try to find a way to include all supporters in this Fan ownership thing. 

IMHO, they are, but there is only so much they can do with those that clearly have personal agendas against the concept and/or individuals involved. 

I have concerns about the shares issue, but personally, I'd rather give TJF time to explain rather than go feet first. 

[Lambies Lost Doo]

16 hours ago, Jordanhill Jag said:

 

Then 8.5% should have a Board Place and an alternative voice to the Trust Nominees 

If you have a group representing minority shareholders that would be a good shout as you can't have a board place for different individuals with different views.  

[stolenscone]

11 minutes ago, Very Bitter Jag said:

 

I have concerns about the shares issue, but personally, I'd rather give TJF time to explain rather than go feet first. 

I confess that I haven't been following the detail as much as I might have done, but aren't they just non voting preference shares?  So there's a first call on dividends, but no voting rights? (Hence the ability to have a director on the board - which director can be outvoted anyway.)

As I say, I'm not close enough to the details, but if it's viewed as an unsecured, interest free loan, repayable only if a company that's never had £2m in the bank happens to have £2m in the bank, then it feels a bit less sinister than is being portrayed.  I may be wrong in my assessment though, which is just a personal view.

[Lambies Lost Doo]

3 hours ago, Lenziejag said:

I am finding it a bit bemusing that TJF or at least WJ is arguing the establishment position of boards. Here was me thinking that their idea was to try to find a way to include all supporters in this Fan ownership thing. 

He's explaining the rules of running an organisation 

[Woodstock Jag]

22 minutes ago, stolenscone said:

I confess that I haven't been following the detail as much as I might have done, but aren't they just non voting preference shares?  So there's a first call on dividends, but no voting rights? (Hence the ability to have a director on the board - which director can be outvoted anyway.)

As I say, I'm not close enough to the details, but if it's viewed as an unsecured, interest free loan, repayable only if a company that's never had £2m in the bank happens to have £2m in the bank, then it feels a bit less sinister than is being portrayed.  I may be wrong in my assessment though, which is just a personal view.

To be clear, this deal involves the issuing of voting redeemable preference shares. Hence the (for the time being) dilution of voting share capital.

TJF attempted to pull together a group of investors in early 2023 on the basis of a non-voting preference shares model (Sandy alluded to this at July’s AGM) but for various reasons these efforts didn’t bear fruit.

[stolenscone]

Thanks for clarifying WJ.  Not ideal, but perhaps understandable given the precarious finances.

[eljaggo]

WJ, what percentage of the voting shares do these 3 investers own?

[Jordanhill Jag]

14 hours ago, Woodstock Jag said:

No, not at all. I'm simply pointing out that the nature of their influence isn't, and never has been, through the boardroom. That isn't how private companies limited by share capital work. It's never been how they work.

The influence of micro-shareholders is through the legal protections provided by company law. Always has been. Always will be. Nothing has changed in that respect.

The whole point of the corporate trustee model is that, at the appropriate time, the individual trustees will step away and the PTFC Trust will be entirely controlled by democratically elected fan ownership groups.

TJF has run two sets of elections in the last 18 months. It has a vibrant membership of over 1650 members. The turnout at its last election exceeded two-thirds of the eligible electorate. Every single TJF member is eligible to stand for election, and to become part of the leadership group. Many have done so, and put themselves up to the scrutiny of their fellow fans.

The Jags Trust is obviously a much smaller organisation, but its constitution is a democratic one that requires elections to be held. It was precisely in the interests of bringing the fans together that the Working Group at the turn of the year recommended that they should be part of the revised fan ownership model. To demonstrate that this was not some TJF coup-d'etat but the arrival at a consensus between groups acting on behalf of the widest possible base of Thistle fans.

The Jags Trust isn't represented on the Club Board Jim! It is one of four trustees that look after the fan ownership vehicle under company law on behalf of the beneficiaries.

And that was a very worthy thing to do. It doesn't mean that you should be getting a seat on the Club Board though Jim.

Again, that's a very worthy thing for you to do. But it doesn't mean you should get a seat on the Club Board!

This was done historically for micro-shareholdings. There was never any expectation in the 1990s that these share purchases would give those shareholders any meaningful say over the composition of the Club Board. Micro-shareholdings were, by and large, symbolic momentos for individuals who wanted to support their Club in a time of need.

Unlike (say) the historic investments of people like David Beattie, or Billy Allan, or Colin Weir, these were not big-ticket strategic investments into the football club, done with a view to getting a seat at the table to strengthen and influence the sustainability of the Football Club.

First - I have no interest in joining the Club Board on any level 

Second - neither the Thistle Trust nor the Jags Trust Hold Elections - the first has a Seat on the Board - the Second a Trustee - both having a major say in key decisions on the Club as recent events on Boardroom Changes and Articles changes have shown 

However in your view both the above organisations have earned the right to have a say in the Club - but Minority Shareholders who actually put in there cash dont 

This isnt about the Companies Act etc - this is about balance 

You have gone to great lengths arguing the case against Minority Shareholder representation - the justification for the Thistle and Jags Trust is Non Existent - they are accountable to No One   

[Woodstock Jag]

3 hours ago, Lenziejag said:

I am finding it a bit bemusing that TJF or at least WJ is arguing the establishment position of boards. Here was me thinking that their idea was to try to find a way to include all supporters in this Fan ownership thing. 

It’s not “the establishment position”.

It’s how all football clubs that are more than 50% but less than 100% fan-owned work.

The several hundred St Mirren micro-shareholders making up 21% of its share capital have zero Club Board directors. The 1200 or so SMISA members are part of an organisation with the right to appoint 4 Club Board Directors (the majority).

The Well Society owns (IIRC) 74% of the voting share capital of Motherwell. Its Club Board consists of just four board members. Two appointed by The Well Society when fan ownership was delivered, one who has been a board member since day dot (Jim McMahon) and one appointed in 2020 (Andrew Wilson) after a skills audit. The other shareholders have zero board representation, and none of them individually own (say) even 5% of the Club.

Hearts is (IIRC) just over 75% fan owned, with Bidco (Anne Budge) having retained just over 17%, and the rest owned by hundreds of micro-shareholders. Their Club Board consists of two Foundation of Hearts reps, Anne Budge, and independent and executive directors appointed on a skills based audit. There is zero representation for micro-shareholders.

The mechanism for inclusive democracy is the fan ownership vehicle, and through organisations that confer influence on a one-member-one-vote basis. This is the case with the elections held by TJF. This is the case with any beneficiary votes held under the PTFC Trust deed.

Micro-shareholdings do not provide the basis for that. They would give, for example, Lord Smith of Kelvin ten times as much influence over the micro-shareholding director Jim seems to want as Jim would have.

As other fan owned clubs have consistently shown, the appropriate board appointments mechanism is one that blends fan ownership vehicle representation and skills-based appointments.

That is what we will be seeking to implement as part of the review of the Club-Trust relationship.

[Woodstock Jag]

12 minutes ago, eljaggo said:

WJ, what percentage of the voting shares do these 3 investers own?

This will be public domain information in the next Confirmation Statement (due in at Companies House in mid-November) - but it’s an 8-1-1 split.

[eljaggo]

Why so coy about revealing the %?

[Woodstock Jag]

9 minutes ago, Jordanhill Jag said:

First - I have no interest in joining the Club Board on any level

I know you don’t Jim. I was teasing you!

9 minutes ago, Jordanhill Jag said:

Second - neither the Thistle Trust nor the Jags Trust Hold Elections - the first has a Seat on the Board - the Second a Trustee - both having a major say in key decisions on the Club as recent events on Boardroom Changes and Articles changes have shown

I think there is one important point here. Under the agreed fan ownership model, the PTFC Trust isn’t supposed to hold elections. What you’re describing are legacy arrangements as part of the transition. The PTFC Trust’s board appointments, for example, were made in November 2022, before the Short Life Working Group had even met to discuss bringing the fan groups together.

As and when Richard and Neil step aside, there will be no individual trustees. The only trustees will be fan organisations.

And under the trust deed certain decisions aren’t taken by the trustees at all, but by beneficiary vote. Including TJF members, Jags Trust members, and season ticket holders. This is democratic. This includes a tie-breaker mechanism where the trustees disagree with one another on any matter.

The day-to-day democratic input comes, and will come more explicitly, through TJF as the transitional arrangements properly bed in.

9 minutes ago, Jordanhill Jag said:

However in your view both the above organisations have earned the right to have a say in the Club - but Minority Shareholders who actually put in there cash dont

The PTFC Trust is a single organisation that holds 68% of the voting shares in the company. It represents more than 2000 beneficiaries (including more than 1650 members of TJF). Its leadership group includes, and will eventually consist exclusively of, democratically elected membership-based fan organisations.

Yes. It has a greater reasonable expectation to be able to impact Club Board appointments, make decisions about investments, and make changes to the company rules, than an unorganised group of 200+ micro-shareholders, none of which individually holds more than 1.5% of the voting share capital, most of whom hold less than 0.2% of the voting share capital, and none of whom have come to a co-ordinated, collectively agreed view on the management of the company.

9 minutes ago, Jordanhill Jag said:

This isnt about the Companies Act etc - this is about balance 

You have gone to great lengths arguing the case against Minority Shareholder representation - the justification for the Thistle and Jags Trust is Non Existent - they are accountable to No One   

I have gone to great lengths to show it’s not a thing, because you’ve thrown a big red herring into this discussion Jim.

The whole point is that we are operating within a structure of company law, that then sets out and defines the rights of majority and minority shareholders. It is precisely the fan ownership vehicle’s structure that seeks to facilitate participation by fans.

With the best will in the world, it’s the job of the PTFC Trust to represent its beneficiaries’ interests; not those of other shareholders.

[Woodstock Jag]

2 minutes ago, eljaggo said:

Why so coy about revealing the %?

I’m not being coy! I just said! It’s 8-1-1.

I’m simply pointing out that this information isn’t in any public documents yet (because of how the filings at Companies House work) but that they very soon will be.

[lady-isobel-barnett]

24 minutes ago, Woodstock Jag said:

 but it’s an 8-1-1 split.

FFS! Even Craig Levein wouldn't be that defensive.

[Jordanhill Jag]

26 minutes ago, Woodstock Jag said:

I know you don’t Jim. I was teasing you!

I think there is one important point here. Under the agreed fan ownership model, the PTFC Trust isn’t supposed to hold elections. What you’re describing are legacy arrangements as part of the transition. The PTFC Trust’s board appointments, for example, were made in November 2022, before the Short Life Working Group had even met to discuss bringing the fan groups together.

As and when Richard and Neil step aside, there will be no individual trustees. The only trustees will be fan organisations.

And under the trust deed certain decisions aren’t taken by the trustees at all, but by beneficiary vote. Including TJF members, Jags Trust members, and season ticket holders. This is democratic. This includes a tie-breaker mechanism where the trustees disagree with one another on any matter.

The day-to-day democratic input comes, and will come more explicitly, through TJF as the transitional arrangements properly bed in.

The PTFC Trust is a single organisation that holds 68% of the voting shares in the company. It represents more than 2000 beneficiaries (including more than 1650 members of TJF). Its leadership group includes, and will eventually consist exclusively of, democratically elected membership-based fan organisations.

Yes. It has a greater reasonable expectation to be able to impact Club Board appointments, make decisions about investments, and make changes to the company rules, than an unorganised group of 200+ micro-shareholders, none of which individually holds more than 1.5% of the voting share capital, most of whom hold less than 0.2% of the voting share capital, and none of whom have come to a co-ordinated, collectively agreed view on the management of the company.

I have gone to great lengths to show it’s not a thing, because you’ve thrown a big red herring into this discussion Jim.

The whole point is that we are operating within a structure of company law, that then sets out and defines the rights of majority and minority shareholders. It is precisely the fan ownership vehicle’s structure that seeks to facilitate participation by fans.

With the best will in the world, it’s the job of the PTFC Trust to represent its beneficiaries’ interests; not those of other shareholders.

Here is the problem 

Two of the Trusts should have no say in the Running of PTFC - one was in effect made up to accept Colin Weirs Shares - the other has been defunct for Years 

They joined together to give the illusion of Fan Ownership - however only TJF can make that claim - but for Political Expediency we pretend the three entities are equal - thats fine

However two of the entities have nominated Directors and Trustees making key decisions about the Club - they are accountable to no one

The Board and the Trustees have become one in the same thing - rather than Shareholders holding the Board to Account - they do there bidding - and for clarity Im not talking about Sacking the Chairman

The changes to the Quromn Rules are to accommodate the Board - there is no benefit to Shareholders whatsoever - the Board have so few members it may struggle to meet the required three minimum

Rather than the Shareholders telling them “ tough” you created the problem - you deal with it - the Trustees changed the rules to accommodate the Board - after all three of the Board are Trustees Nominees - why would the Trust not do there bidding 

If we have such a cosy relationship the concept of Shareholders holding Boards to account disappears 

Therefore we need alternative views on the Board - the most logical one being from the Minority Shareholders - the only Group who actually used there own cash to buy shares 

As for the ridiculous Quromn Rule changes - they should be removed at the AGM - they are farcical 

 

[Very Bitter Jag]

3 hours ago, stolenscone said:

I confess that I haven't been following the detail as much as I might have done, but aren't they just non voting preference shares?  So there's a first call on dividends, but no voting rights? (Hence the ability to have a director on the board - which director can be outvoted anyway.)

As I say, I'm not close enough to the details, but if it's viewed as an unsecured, interest free loan, repayable only if a company that's never had £2m in the bank happens to have £2m in the bank, then it feels a bit less sinister than is being portrayed.  I may be wrong in my assessment though, which is just a personal view.

My feelings and understanding of the deal, from what you have said above, seam to pretty much align. My concern was/is more the rush, I would like to understand the reason for that, since I also understood the committed TJF contributions had resolved any immediate issues. Also whilst not necessary against the German model, so far as I understand it, I would have though fans should have been consulted on that before potentially using it as justification for reducing our shareholding at this point. 

[Lenziejag]

1 hour ago, Very Bitter Jag said:

My feelings and understanding of the deal, from what you have said above, seam to pretty much align. My concern was/is more the rush, I would like to understand the reason for that, since I also understood the committed TJF contributions had resolved any immediate issues. Also whilst not necessary against the German model, so far as I understand it, I would have though fans should have been consulted on that before potentially using it as justification for reducing our shareholding at this point. 

Also hoping that the deal wasn’t so rushed that there wasn’t enough time for due diligence.

[The Legend Blows]

This whole affair absolutely stinks and as far as I can tell TJF who we'd hoped might bring some sanity and clarity to the running of PTFC are powerless puppets in this whole shoddy affair. 

I'll say it again, but does anybody know what the funk is going on here?

What individual or individuals are wielding all the power here and delivering this laughable excuse for fan ownership?

Wee Jacqui must be pishing herself laughing at the Thistle fans and the great new dawn we're having after her departure.

Edited October 15, 2023 by The Legend Blows