LONDON (ShareCast) - (Sharecast News) - Civitas Social Housing dismissed allegations made by a short seller after the company suffered a shareholder revolt against suspension of pre-emption rights.
The real estate investment trust's shares fell on 13 September after ShadowFall, a short seller, alleged the company hid a transaction that put investors at a disadvantage.

ShadowFall published an open letter to Civitas's chairman to coincide with the company's annual meeting setting out details of its allegation that a company partly owned by Civatas directors Tom Pridmore and Andrew Dawber bought buildings from Civitas without the deals being disclosed.

On Thursday Civitas said: "This letter was issued without any engagement on the author's part with the board of Civitas. It is the Board's belief that the letter is based on factual inaccuracies, incorrect assumptions, erroneous comments and assertions which are not grounded in fact."

Civitas said it would publish a full response after reviewing the letter in detail. It said the board had great confidence in the company's assets, revenue and strategy and that it was performing robustly in line with expectations.

Shares of Civitas fell 2% to 93.58p at 08:25 BST. The shares have lost more than a fifth of their value since 5 August.

At the AGM more than 27% of shareholder votes opposed a resolution that would have allowed the company to sell stock representing up to 20% of its share capital without offering them to existing investors.

The revolt followed a recommendation by Pirc, a shareholder adviser, to oppose the resolution. Shareholders approved a resolution allowing the company to issue up to 10% of shares without applying pre-emption rights.

"The directors respect the wishes of certain shareholders not to increase this threshold at the present time," Civitas said. "The company, via their corporate brokers, intend to speak to the largest shareholders who voted against this resolution."

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