Honeycomb board defends Pollen Street Capital governance
The board of the Honeycomb investment trust has jumped to the defence of its investment manager Pollen Street Capital (PSC) over poor governance allegations.
It comes as PSC was issued with a termination notice from the other investment trust it manages, Pollen Street Secured Lending (PSSL), amid accusations that it has refused to provide due diligence documents to a potential purchaser of the fund. The claims have been denied by PSC.
Honeycomb said in a stock market update from its chairman Robert Sharpe that the board finds accusations against PSC hard to believe.
“The team at PSC has managed Honeycomb since the company’s inception in December 2015,” Sharpe said.
“Throughout the whole of that period my experience is that the team has acted at all times with absolute integrity, and good governance.
“PSC’s interaction with the board has been transparent and collaborative and they, like us, have always been focused on managing the company in the best interests of its shareholders.
“We are very disappointed that the recent PSSL events have been presented in a way which implies that PSC is in some way lacking in any of these qualities.
“I find some of the accusations very hard to believe, as they do not at all reflect the Honeycomb Board’s relationship with or experience in dealing with PSC.”
He added that the alternative finance-focused investment trust’s board has full confidence in the PSC management team.
It comes as Honeycomb’s latest monthly report for January showed it posted a record net asset value (NAV) return of 1.62 per cent.
This is its highest ever NAV, beating the 1.36 per cent reached in April 2018.
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The board of PSSL has issued a 12 month termination notice to PSC.
“While PSC considers the termination to be wholly unjustified, unnecessary and an action which can only lead to potential risk and damage to shareholders, it is satisfied that the situation has been made public so that shareholders can consider and determine the appropriate and desired approach,” PSC said. “PSC remains ready to assist and deliver value for all shareholders as they consider appropriate.”
PSSL made a further statement later on Monday in response to PSC.
“While PSC may advise the board, PSC is not the board and is obliged to follow instructions given by the board,” PSSL said in the statement.
“The board believes that Waterfall’s proposal is genuine and serious and is one that, having taken advice, it would be minded to recommend.
“Waterfall’s proposal should not be frustrated by PSC’s failure to provide the company with its own information.
“That information is needed so that the board can form a view as to what would be appropriate to share with Waterfall for the purposes of due diligence.
“Any reader of the PSC announcement will understand just how difficult the relationship with PSC has now become and how important it is for the board to ensure good governance.
“The board will address in detail in a further announcement and letter to shareholders the numerous mistaken arguments and criticisms set out in PSC’s announcement of this morning.
“For now, the immediate focus of the board is ensuring that the proposal from Waterfall is not frustrated through the company’s inability to engage constructively with Waterfall, while also seeking to ensure that the company’s business continues to operate in line with the principles of good corporate governance.”