MONTREAL — The largest shareholder of Aimia Inc. raised objections Tuesday regarding how the company went about appointing two new directors in the latest escalation of tensions between management and investors at the loyalty rewards company.
Mittleman Brothers LLC, which owns or controls about 23.3 per cent of Aimia's outstanding shares, said the company did not consult it on the directors it appointed Monday.
The investment firm says its representative on the board — Phil Mittleman — was only told of the proposed appointments on Sunday and formally dissented.
The appointments, which increase the board size by a third, go against the company's aim of reducing the board from nine members to six to cut costs, Mittleman Brothers said.
The investment firm also objected to the fact that the appointments were not presented to, or voted on, by shareholders even though they came only 17 days after the company's annual meeting.
"Mittleman believes that public companies, such as Aimia, should respect basic principles of shareholder democracy and that directors should be elected by shareholders — and not furtively appointed after the fact," the firm said in the release.
The company named Dieter Jentsch, a former Scotiabank executive, and Frederick Mifflin, vice-chairman and partner at investment bank Blair Franklin Capital Partners, to its board on Monday.
"Aimia's board today is the result of a deliberate, rigorous and successful process carried out in compliance with good corporate governance practices," said company spokeswoman Karen Keyes by email Tuesday.
The additional business expertise the two bring is in line with the company's previously stated commitment to "continuously refresh and re-align the board with the company's new strategic direction as a loyalty and travel-focused consolidator," said Keyes.
The appointments came as the company faces pressure from a group of shareholders who are calling for a redo of Aimia's annual meeting that was held last month that they say was "plagued with irregularities."
The group, dubbed Aimia Shareholders for Accountability, said last week that the chairman refused to conduct votes or take questions and allowed security guards to intimidate shareholders who attempted to speak, with one being "forcibly" removed.
Mittleman Brothers, which noted it was not part of the group, said in a statement that its representatives observed the same irregularities.
Aimia has said the June meeting was conducted in accordance with all applicable rules and regulations and that a do-over would be redundant.
The company sold its Aeroplan loyalty program to Air Canada earlier this year for $450 million, leaving it with significant cash on hand but also questions about its future.
Companies in this story: (TSX:AIM)