Why did the rules allow a major Scottish company's entire board to be ousted?

Business Editor Ian McConnell weighs the major issues raised by the saga.

Persistence is in many situations an admirable quality.

Not so, however, in the context of a US hedge fund’s repeated attempts to oust the entire board of a major Scottish company.

US hedge fund manager Boaz Weinstein’s Saba Capital Management achieved its wish to oust the entire board of Edinburgh Worldwide Investment Trust last week - at the third attempt - replacing it with individuals chosen by Saba.

It had returned with this third attempt on February 10, in spite of its proposals having been overwhelmingly rejected by non-Saba shareholders as recently as January 20 and also on Valentine’s Day last year.

And this time Saba got its way with the outgoing board of Edinburgh Worldwide revealing on Thursday last week - hours before the result was confirmed after the annual meeting votes were counted – that it expected to be ousted with three other US investors not backing the existing directors.

It noted that Saba - with a stake put at “just over” 30% in January by then Edinburgh Worldwide chairman Jonathan Simpson-Dent - and the three other US investors owned more than 40% of the trust in total.

So sadly this time, even though individual investors turned out in numbers again to oppose Saba, the US hedge fund got what it wanted at the third time of asking at Edinburgh Worldwide, which had total assets of £864.71 million at March 31 and is managed from the Scottish capital by Baillie Gifford.

This tale of woe at Edinburgh Worldwide, which has Elon Musk’s SpaceX as its single largest holding, has led, most understandably, to calls for changes in the listing rules.

Financial markets are obviously a cold matter, driven by money rather than emotion.

However, the fact that Saba has been so........

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