Wellington, Nov 2 NZPA - An unexpected stand by institutional shareholders against SkyCity updating its constitution with NZX listing rules is being seen as curious, but also a message to all boards.

SkyCity said certain institutions voted against resolution four at its annual meeting on Friday and it was not passed.

The resolution updated the company's constitution solely to reflect changes to NZX listing rules.

The rules were more permissive on a range of issues but the company said it would not suffer as a result of having to stick to its existing constitution with old NZX rules.

Institutional investors were either unavailable or did not want to talk publicly about the issue today.

Critics said the stand was belated as the NZX rules came into force in April and there was a process of consultation to create them.

Under the rules an company can issue up to 20 percent of the total number of shares on issue without seeking shareholder approval, up from 15 percent previously.

There were also changes to the director, employee and related party participation in placements of shares and to the remuneration of directors by the issue of securities.

Fund manager Brian Gaynor said he was at the SkyCity meeting thinking when were New Zealand investors ever going to take a stand and then one was surprisingly taken.

His fund, Milford Asset Management, did not put in proxies ahead of meetings, preferring to attend them.

The vote was unlikely to affect other companies as many had constitutions that automatically updated changes to NZX rules.

Former fund manager Simon Botherway said it was not before time that institutional investors took a stand.

If they were concerned about having rights abrogated they had to have demonstrated they valued those rights by using them.

A fund manager who declined to be named said the vote was a signal of concern about the need for shareholders to be consulted via votes at meetings.