yesterday, as shareholders of the largest foreign investment fund operating in Chile rejected a hostile takeover bid.

The vote came in the second of two extraordinary general meetings.

The target was the $600-million GT Chile Growth fund, for which the bank is international custodian and administrator.

The shareholders voted to rebuff the advances of London-based Regent Kingpin Capital Management and remain with San Francisco-based GT Capital Management.

The rejection means no more than one third of the fund's $600 million in assets held in Chile will be liquidated.

Shares representing 58.7 percent of the votes cast rejected Regent while 41.3 percent voted in favour.

The board also said that due to a technical error by Regent Kingpin, motions calling for the replacement of three GT Chile Growth Fund directors with three representatives of Regent Kingpin, were declared invalid.

The board said voting for these changes was rejected by the majority of shareholders on the same percentages expressed against the other Regent proposals.

Earlier, after the first EGM, GT Capital Management said shareholders approved its proposals to liquidate a third of the GT Chile Growth Fund.

Also agreed to was a resolution authorising the board to proceed to put forward a scheme to establish a new holding company to become open ended.

Kingpin had proposed to allow shareholders to liquidate as much of the fund as they want, estimating that between 30 percent to 40 percent of shareholders would take up the offer.

But GT Capital's proposals were approved by 62 percent of the votes cast. In an exceptionally high voter turn-out, proxies attributable to a total of 10,794,735 were received, meaning almost 90 percent of shares were represented in the vote.

GT Chile Growth chairman, Peter Stevens said: "The board is encouraged by the resolute support of a clear majority of shareholders. We can now swiftly go forward with a plan which balances the interests of all our shareholders by returning value at a premium to the market price, by providing continued exposure to the Chilean market and by addressing the discount issue.

"GT Capital Management, the fund manager, is committed to providing shareholders with excellent long term returns. I encourage Regent Kingpin not to interfere further with this objective.'' The board said that their approved proposals are designed to enhance shareholder value and will enable shareholders to surrender shares for cash at 100 percent of Formula Asset Value on the basis of one share for every three held.

Describing their proposals' structure as innovative, the board said that the Rights to surrender shares for cash will be listed on the London Stock Exchange between October 25, closing November 24, with acceptance letters sent out October 24.

Kingpin's rival proposals were rejected by 58.6 percent of the shareholders who voted, while 41.4 percent voted in favour.

The fund reduced its share portfolio by $70 million, or 12 percent, during September, to 189.88 billion pesos ($471 million) from 216.77 billion pesos.

Another 7 percent of the fund was already in fixed-rate securities.

Investors in Chile were concerned that if Kingpin was successful in its bid for the GT Chile Growth fund, many more shares would have been unloaded on stock exchanges.

Regent Kingpin had previously claimed control over almost 24 percent of the voting stock, including shareholders who supported the plan to partially liquidate the fund to pay back those who want to get out.