Reject Wetherspoon report over pro-Brexit outlay, investors told – The Guardian, Theguardian.com

JD Wetherspooninvestors should vote against the company’s annual report at its shareholder meeting because of the pub chain’s spending on pro-Brexit materials, according to an influential shareholder advisory group.

Pensions & Investment Research Consultants (PIRC) said shareholders should oppose Wetherspoon’s annual reportafter the Guardian raised questions about the company’s spending of almost £ 95, 000 During the 2016 Brexit referendum campaign. Legal experts said the pub chain appeared to have broken company law by buying and distributing 1.9m beermats supporting Brexit.

PIRC advised shareholders to vote in favor of Wetherspoon’s annual report in 2018, but has changed its recommendation this year because of the (Brexit) referendum spending and what it said were weak policies on sustainability.

“Due to these sustainability concerns, and as a precautionary measure against potential political expenditure concerns, an oppose vote is recommended,” PIRC said in a note to investor clients.

In response, Wetherspoon’s chairman Tim Martin told the Guardian by text message: “PIRC rhymes with berk.” He said he would not comment further on the matter until after the AGM on (November. *)

Martin has used Wetherspoon as a platform for his pro-leave views on beermats, in the company’s magazine and in its corporate reporting. He owns 32% of the company, with most of the remaining shares held by City investors on behalf of pension funds. The company reported £ 94, 586 of spending during the Brexit referendum to the Electoral Commission.

Lawyers said the beermats, which cost more than £ 24, 000, appeared to be political expenditure under the 2006 Companies Actbecause they urged people to vote leave. The act says political expenditure includes activities “capable of being reasonably regarded as intended to influence voters in relation to any national or regional referendum”.

Companies are required to get prior shareholder approval for political expenditure, but Wetherspoon did not present shareholders with such a resolution. Political spending of more than £ 2, 000 in a year should also be set out in the annual report, which Wetherspoon did not do.

Martin told the Guardian his understanding was that the act did not require JD Wetherspoon’s spending to be approved in a shareholder resolution. “The Electoral Commission does require the expenditure to be reported and we complied with this requirement,” he said.

Wetherspoon has continued to promote Brexit since the referendum in its financial reporting.The company’s recent annual results featured more than 2, 000 words of Martin’s views on the EU and supporting materials.Wetherspoon publishes a trading update next week.

Martin has said shareholders are comfortable with him using the company to promote his views. But the Guardian has reported that at a meeting in April, some large investors had asked him to stop using Wetherspoon’s corporate reporting to campaign for Brexit.

Martin has already lashed out at Glass Lewis, another shareholder adviser, over its opposition to Wetherspoon’s remuneration report. Glass Lewis was financially illiterate and talking “complete bollocks” in criticizing a pay rise for Wetherspoon’s finance director, Martin told the Sunday Times. Glass Lewis advised shareholders to support the annual report.

At last year’s AGM, a significant minority of shareholders withheld support from some of the company’s non-executive directors over concerns about their independence. Wetherspoon has agreed to replace the directors over the next three years.