- Saba Capital Management, owning 17.2% of ASA Gold and Precious Metals (ASA, Financial), has filed a lawsuit against ASA and its legacy directors.
- The lawsuit challenges the repeated readoption of an unlawful poison pill, violating the Investment Company Act of 1940.
- Saba seeks recission of the poison pill and an injunction against further implementation.
Saba Capital Management, the largest shareholder of ASA Gold and Precious Metals (ASA) with a 17.2% stake, has taken legal action against ASA and its legacy Board members. The lawsuit focuses on the Board's readoption of a poison pill strategy that a federal court already deemed unlawful. This poison pill has been continuously in effect for over 474 days, restricting Saba from increasing its shareholding.
The United States District Court for the Southern District of New York previously ruled on March 28, 2025, that ASA's initial shareholder rights plan violated Section 18(d) of the Investment Company Act of 1940, as it provided non-proportional subscription rights. Despite this ruling, ASA quickly reinstated a similar plan, prompting further legal challenges from Saba.
Saba Capital argues that ASA's actions prioritize fees and self-preservation over shareholder interests. The governance issues highlighted include the formation of "Shadow Board" committees, which excluded newly elected directors from important decisions, further complicating the governance landscape at ASA.
Saba seeks the recission of ASA’s latest poison pill, a declaration of its violation of federal law, and an injunction against future implementations. By taking these legal steps, Saba aims to ensure the Board respects shareholder interests and adheres to sound governance principles.
