THE Scottish Mortgage Investment Trust has announced that chairman Fiona McBain is to step down as it revealed progress on a boardroom shake-up was “well advanced”, following a steep fall in its share price over the last 18 months.

The changes follow reports of a boardroom dispute at the Edinburgh-based investment giant, centring on claims by non-executive director Amar Bhide that the board had sought his removal and disagreement over investment strategy and board appointments.

Last week, Scottish Mortgage refuted claims it had sought to remove him, but it announced yesterday that he has now left the board and is no longer a director of the company.

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Shares in the 114-year-old trust, managed by the venerable Baillie Gifford investment house, have lost more than half of their value over the last year and a half.

The company said yesterday that Ms McBain will bring her six-year spell as chairman to an end and step down as a director following 14 years on the board upon the conclusion of its annual general meeting in June.

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Ms McBain, a chartered accountant, and former chief executive of life and investments mutual Scottish Friendly, will be succeeded as chairman by Justin Dowley, currently senior independent director, subject to his re-election by shareholders at the AGM.

The trust also announced that professor Patrick Maxwell would succeed Mr Dowley as senior independent director, subjected to being re-elected, and professor Paolo Subacchi will retire as a director after nine years under changes arising from succession planning “which has been developed and supported by all of the directors over the course of the last 12 months”.

The Financial Times reported recently that Mr Bhide had been asked to resign after clashing with directors over the appointment of new directors and the strategy of investing in unlisted companies. The trust denied claims that he had been asked to step down, and released a statement to the stock market on March 17 stating that he remained a director and had not been resigned or removed. However, it said yesterday that Mr Bhide has now left.

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The most recent results for Scottish Mortgage, which holds major holdings in Covid vaccine developer Moderna and electric car maker Tesla, showed a negative total return on net asset value of 15 per cent in the six months to September 30.

That compares with a total negative return of 7% on its benchmark FTSE All-World Index. Its share price went from a 3.6% premium to net asset value on September 30, 2021 to a discount of 10.6% a year later.

However, Scottish Mortgage emphasised the importance of reviewing performance over a much longer time frame.

In November it reported that over 10 years its total return on net asset value per share had increased by 528% versus a 208% increase in the FTSE All-World Index, and that over five years it had increased by 115% against 53%.

The company said in November that it held 30.9% of investments in unlisted (private company) securities on September 30, 2022, up from 24.6% on March 31 last year, and 66.8% in listed equities, down from 73.9%.

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Scottish Mortgage said yesterday that the board in recent months has been “conducting a recruitment process, using an external search firm, with a view to further board refreshment”.

It added: “That process is now well advanced.”

Mr Dowley said: “On behalf of the board, I would like to thank Paola for her substantial contributions during her nine years as a non-executive director.

“I would also like to thank Fiona for her 14 years of loyal and exceptional service to the company, in particular over the last few years (and at the request of her fellow directors) providing essential continuity, reassurance and leadership during the extraordinary circumstances of Covid-19 and through a period of transition on the board and with the managers.”

A request for comment was made to Mr Bhide.

Shares in Scottish Mortgage closed up 7.4p, or 1.12%, at 669.6p, giving it a market capitalisation of £9.4bn.