Scottish Widows Investment Partnership, which lost a plum property fund mandate in February to the former head of its property team, today sought to remove the new board and wind up the fund

SWIP’s client, Scottish Widows Unit Funds (SWUF), which is the largest shareholder in the £294m UK Balanced Property Trust, has requisitioned an extraordinary general meeting of the UK Balanced Property Trust requesting that Malcolm King, Richard Prosser and Charles Wilkinson be appointed as directors in place of the existing directors, and that the trust be wound up.

‘SWUF has taken this course of action to protect and enhance the value of its existing investment in UK Balanced Property Trust,’ said SWUF.

UK Balanced Property Trust was launched in March 2002 with SWIP as its investment manager. On 15 February this year, the board announced that it had served notice terminating SWIP's appointment, and had entered into legally binding heads of terms for the appointment of Cordatus Partners as the trust's investment manager, with effect from 1 May.

Cordatus was set up by the former top two in the SWIP property team, Tom Laidlaw and Mike Channing.

SWUF claimed today: ‘The appointment of Cordatus was presented to SWUF in mid-February 2007 as a fait accompli. Such conduct is contrary to the corporate governance principle of ensuring that a satisfactory dialogue with shareholders takes place based on the mutual understanding of objectives.

‘Furthermore, the board appears to have decided to appoint Cordatus without any in-depth consideration of alternative proposals, contrary to best practice.’

In response to the extraordinary general meeting request, UK Balanced Property Trust said: ‘Although the board has attempted, without success, to engage Scottish Widows Investment Partnership Limited since February 2007 in relation to its clients' shareholdings in the company, the board only received these proposals today.

'Accordingly, the board has not had the opportunity to consider these proposals or discuss them in detail with its advisers.'