Embarrassment for Yahoo! as questions raised over votes at AGM

SAN FRANCISCO - A major shareholder in Yahoo! has called for an investigation into voting at the internet firm's AGM last week, raising pressure on CEO Jerry Yang.

Los Angeles-based Capital Group, which is one of Yahoo!'s biggest shareholders with 16%, has asked for checks to see if votes were properly counted at the annual meeting last week where Yang managed to see off any serious shareholder revolt after reaching a deal with billionaire investor Carl Icahn.

It had been reported that Yang won the backing of 85% of shareholders, which had surprised some industry watchers who thought that questions over his leadership of Yahoo! during Microsoft's abortive bid would lead to more dissent.

It is unlikely that even if there is an investigation it will lead to a dramatic shift in votes supporting Yang, but it will prove embarrassing for him. Last night Yahoo!'s share price dropped 2.12% to $19.38.

Yahoo! dismissed any talk of irregularities and said that any errors were ones that occurred outside of the company.

"The independent inspector of elections certified the results of the election and Yahoo! accurately announced those results. Yahoo did not participate in the execution of the votes and was not a party to any errors which may have been made either by a voting institution or a proxy processing intermediary acting on behalf of banks, brokers and institutions," Yahoo! said in a statement.

Capital Group is reported to have voted against Yang with both of its blocks of shares, one of 6% held by Capital Group Global Investors and a further 10% held by Capital World Investors, which means that every other investor would have had to back him to arrive at the 85% support that the company announced as the result of the vote.

The votes for Yang and chairman Roy Bostock were both bigger this year than they were last.

Capital Group is reported to have asked its intermediary, Broadridge Financial Solutions, to look into how the votes were handled.