A renowned industrialist clashed with bosses of Hampson Industries at the manufacturer’s AGM after a director did not take up shares he was entitled to in a £60 million fundraising bid.

David Grove, a shareholder in the Brierley Hill aerospace and automotive firm, said it was “laughable” that Howard Kimberley did not take up his entitlement to shares, of around £11,000 claiming an “administrative oversight” meant he did not receive the documents to do so.

Mr Kimberley was among the directors of the troubled Black Country engineering group who said they would take up shares they were entitled to when the firm announced it was tapping its shareholders for cash in February.

He was forced into making the statement after being challenged on the issue by Mr Grove at the meeting this week.

The clash comes ahead of a possible High Court battle between Mr Grove and Hampson Industries after a group of investors led by Mr Grove alleged they were misled by the firm in a deal.

However, the Grove Industries founder insisted his challenge at the shareholder meeting was not motivated by the impending legal case, but that he was asking questions as a shareholder in the company.

Speaking after Hampson Industries’ AGM, Mr Grove described the situation as “a laughable state of affairs”.

He added: “I have held shares in Hampson for a long time. I actually sold them in 2008 but I bought some more recently because I felt quite strongly about the company irrespective of any legal action.”

But Hampson defended Mr Kimberley by saying the firm had acted on advice that it was not necessary to take action after the oversight came to light.

A statement issued following the AGM read: “The fact that Howard Kimberley did not subscribe for his entitlement under the open offer was an administrative oversight, having not received an allotment letter.

"This was not picked up either by the receiving agents to the open until it was too late. As soon as the oversight was noticed our advisers were approached and the advice received was that, because this was an oversight and given the relatively small entitlement to open offer shares, the non-subscription for Howard’s entitlement under the open offer was not material (less than £11,000) and hence no further action was required.

“It was clearly inappropriate for Howard to have subscribed for shares following completion of the placing and open offer at the open offer price given the discount to the then prevailing market price of Hampson shares.

“Notwithstanding the above, the board in total subscribed for more new shares than their pro-rata share based on existing holdings under the capital raising as the result of the participation by Kim Ward in the firm placing element of the equity issue.

"The board have considered this matter with the benefit of advice from the sponsor to the issue and the company’s broker and no further action is required.”

Hampson Industries has had a difficult year, having seen a big drop in its share price and admitting in August that its profits for the year would fall short of market expectations.