Last week, FTAdviser reported that Amar Bhidé had left the board of the trust, which is managed by Baillie Gifford, over concerns about how directors are selected and the level of scrutiny around the investment process for the unquoted companies in the trust.
Bhidé departure as a director was confirmed on Monday, along with the announcement that the trust’s long serving director and chair Fiona McBain will step down.
The trust had been seeking to recruit two new directors, Bhidé expressed concern that none of the directors come from a professional investing background.
In a LinkedIn post this afternoon, Bhidé said that his departure was "a last resort after numerous private attempts I made to rectify, going back several months, failed".
He added: "I have presented my concerns, whose manifold aspects could not obviously be explicated in the FT's piece, to the Financial Conduct Authority.
"I hope the Authority looks into the concerns carefully -- I have provided evidentiary back up (the "paper trail") to the Authority and will be speaking to them shortly.”
Board members of investment trusts are non-executives and part-time, and do not need to be FCA authorised persons.
But investment trust’s are listed on the stock exchange, and so are subject to the rules of the relevant listing authority in the UK, which is the Financial Conduct Authority.
Governance for investment trusts is under the auspices of the Association of Investment Companies, and the guidance on Chair tenure is different. The FRC has confirmed that AIC member companies who report against the AIC Code meet their obligations in relation to the UK Code.
Bhidé continued: “Having fulfilled my duty to shareholders, having done what I believe is right, I will have nothing more to say.
"The trust's and (Baillie Gifford) overall philosophy of backing very high potential companies is laudable. (Baillie Gifford) is an honorable, capable organisation. I wish them well.”
Baillie Gifford declined to comment.
Baillie Gifford is the investment manager for the trust, and it is overseen by the board of directors, rather than being accountable for the performance or actions of the directors.
Scottish Mortgage shares have lost 2 per cent since the market opened this morning and are down 17 per cent over the past six months.
david.thorpe@ft.com
