Ingersoll-Rand Co. shareholders narrowly defeated a motion to leave Bermuda move the company back to the United States.

It was a close call at the annual general meeting of the diversified manufacturer with 58.6 percent voting to stay in Bermuda and 41.4 percent in favour of the proposal to reincorporate in the US. “The results of the vote on this proposal indicate that many shareholders wish us to remain sensitive to the impact of reincorporation on our company,” said Herbert Henkel, chairman, president and chief executive officer.

“We will continue to monitor changes in legislation that might affect our business and continue to evaluate the advantages and disadvantages of maintaining our current corporate structure.”

The company does not have an office in Bermuda and has no employees. It simply has a registered office through a law firm, a fact which has enraged American shareholders who believe the move offshore to be unpatriotic and could fact being penalised by Congress.

Senators have been trying to find a way to stop companies moving to tax-friendly jurisdictions for decades, but in the past year, Congress has come close to trying to stop so-called “tax loopholes” and halt companies from leaving the US for tax reasons.

Other companies to move to Bermuda include Nabors and Weatherford International. Stanley Works had intended to move to save on its tax bill, but pulled out due to adverse publicity. It has posted four quarters of losses and said it has to lay off 1,000 staff.

Ingersoll-Rand is one of a handful of companies being pressured to reincorporate in a campaign led by the American Federation of state, county and municipal employees and the Connecticut Retirement and Trust funds. This varied group of shareholders have been campaigning for the company to move back to the US from Bermuda even going as far as taking out an avertisement in USA Today to promote their cause.

Supporters of the proposal had argued the company could still lose numerous government contracts as well as any state tax benefits because of its legal move to Bermuda. They also felt Bermuda law did not provide as many protections for shareholders as US law.

Ingersoll-Rand shares dropped $1.08 yesterday to $42.41.