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Athelney Trust plc - Letter to Shareholders

Dear Fellow Shareholders

I am writing to you ahead of the Annual General Meeting on 3 April 2019 when we will all be voting on resolutions required in terms of the Companies Act and a few that I have proposed. The purpose of this letter is to explain my reasons for the additional agenda items and why I believe we should remove the current Board in its entirety, appoint Simon to the Board and definitely not authorise the issue of any shares by the current directors.

In essence my rationale for these recommendations is based on the following observations:

·    There is zero alignment of interest between the current directors, Gresham House (who recommended their appointment) and the shareholders of Athelney. Gresham House clearly have their own agenda to pursue and none of the current directors' have taken the time to acquaint themselves with the other Athelney shareholders as Simon Moore had done during his brief stint as a director and Chairman.  Furthermore, as far as I am aware, neither Gresham House nor any of the current directors own any shares in Athelney, a requirement in any small company to ensure alignment of interest.

·    Athelney has always been an extremely well-run Investment Trust with a low-cost structure and a compliance regime suitable for a small company.  It would appear that the current directors have increased the cost base with increased travel and consultant fees, using corporate governance as the reason which is modern parlance for a complete lack of experience in the running of the relevant business.

·    In a recent Royal Commission into the Financial Services Industry, Justice Haynes found that the poor performance of financial institutions was due to a failure at Board level to ensure an appropriate culture, governance structure and remuneration system.  While he confirmed that Boards of Companies are responsible to shareholders, they also have an obligation to all stakeholders such as employees, service providers and customers and more importantly, in the execution of their duties the Boards cannot and must not involve themselves in the day to day management of the Corporation.  The current board, in spite of having no meaningful funds management experience, have on a number of occasions attempted to interfere in both stock selection and asset selection, both of which are not the responsibility of the board but of the investment manager, not only contractually but also as indicated by Justice Haynes as a requirement to ensure good corporate governance.

·    Athelney has always had a culture best described as one of a personalised touch, provided not only by Robin Boyle but also by John Girdlestone and his team at GW & Co.  The current sidelining by the Board of GW & Co with the clear intention of replacing them by a larger firm, implies that their many years of amazing service to Athelney actually means nothing.  I find this disgraceful, destroying the firm culture and also contrary to the findings of Justice Haynes.

·    Simon Moore has a long career in investment trusts and has a strong reputation in the sector. He will bring a deep understanding of Athelney Trust, fellow shareholders, other stakeholders and the technical details required of running an investment trust, all of which the current board lack.

·    I have made an offer to Robin to work with Simon and I over the next two years to bring about an orderly transition and have received no response.

The annual report contains a detailed explanation of our approach to investing. In addition, I urge shareholders to google my name to see what I stand for and what I have accomplished.  I hope you will consider what I have to say and vote as I suggest.

Yours faithfully,

Dr Manny Pohl B.Sc (Eng), MBA, DBA, FAICD, MSAFAA, F Fin

4 March 2019