CLIG City Of London Investment Group Plc

TIDMCLIG

RNS Number : 4015U

City of London Investment Group PLC

06 April 2021

City of London Investment Group PLC ("CLIG")

Intended publication of a circular

Your Board has become aware of an issue in respect of the payment of certain historic dividends (the "Relevant Distributions"), which has resulted in a technical infringement of the Companies Act 2006 (the "Act").

The issue is of an historic nature and there is no change to the financial outlook of the Company as a consequence of this technical matter. It is anticipated it will have no impact on the Group's dividend policy or dividend-paying capacity going forward. The Company's past accounts will not need to be restated and no dividends are expected to be repaid.

The Act requires it to be demonstrated by reference to accounts filed at Companies House prior to payment that the Company has sufficient reserves to pay distributions at the time they are made. Whilst the Group has at all times had sufficient distributable reserves on a consolidated basis to pay the Relevant Distributions, these reserves had not always been distributed upward to CLIG, the holding company, from its operating subsidiaries at the time of declaration. In addition, interim accounts were not always filed with Companies House to show the availability of sufficient distributable reserves in respect of Relevant Distributions by CLIG. Regrettably, the Relevant Distributions were therefore not paid in strict accordance with the Act.

As a result, the Group has been advised that, from a legal perspective, it may have claims against shareholders who were in receipt of these Relevant Distributions and against individuals who were directors at the time they were paid. The Company will therefore convene a general meeting at which it will put forward resolutions which will, if passed, address the situation and put all parties back in the position they were intended to be had the full technical requirements of the Act been complied with at the time the Relevant Distributions were made. The Board will set out full details of the Relevant Distributions in the circular to be posted to shareholders convening the general meeting. The steps being proposed are also in line with those taken by other listed companies that have encountered similar issues in the past.

The Board has undertaken a thorough and detailed review of its reserves and is confident all issues have been identified and that the necessary procedural and administrative improvements have been implemented.

For further information, please visit www.citlon.co.uk or contact:

Tom Griffith, CEO

City of London Investment Group PLC

Tel: 001-610-380-0435

Martin Green/Pippa Hamnett

Zeus Capital Limited

Financial Adviser & Broker

Tel: +44 (0)20-3829-5000

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April 06, 2021 02:00 ET (06:00 GMT)

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