Shareholders of Toronto-based Home Capital Group Inc. overwhelmingly voted against Warren Buffett upping his stake in the mortgage lender, with some citing a fear of losing control of a Canadian firm to U.S. hands.

At a special meeting on Tuesday, 88.79% of shareholders rejected a plan that would have seen Buffett’s Berkshire Hathaway acquire 23.9 million more shares for $246.7 million, at $10.30 per share.

That would have been on top of Buffett’s initial Home Capital investment of $153 million in June.

Home Capital chairwoman Brenda Eprile said the board was “grateful” to have Berkshire as a major shareholder but it respects the decision made by other shareholders.

“To me, this decision on the second tranche is a clear message that the majority of our shareholders believe that Home Capital’s improved deposit inflows and liquidity position diminish the need for additional capital.”

Home Capital shares were up 5¢, or 0.36%, to $14.13 in the early afternoon on Tuesday once trading resumed after the announcement.

Buffett’s backing and extension of a $2-billion credit facility to Home Capital in June helped restore investor confidence after the alternative mortgage lender faced a partial run on its deposits following regulators’ accusations that the company misled investors.

The mortgage lender’s board unanimously recommended that shareholders approve the additional investment. However, Home Capital shareholders were mixed on Buffett’s second tranche, with some arguing that it would be too dilutive and provide few additional benefits.

Shareholder Harry Houtman cheered, “Wow, great!” when the results of the vote — which needed a simple majority to pass — was announced.

Houtman, who is the founder of Link Charity which holds 20,000 shares but also holds 4,000 shares of Home Capital himself, said he didn’t want another Canadian firm bought by a U.S. investment company.

“We would lose control of this company,” said Houtman, who was among the roughly 50 people who attended the meeting at a small Toronto conference room.

Buffett and Berkshire Hathaway did not immediately respond to a request for comment on Tuesday.

The rejection follows a recommendation by Institutional Shareholder Services that shareholders vote against the proposal. The influential proxy advisory firm said that when it was announced, the second round of equity investment from Berkshire seemed the best available alternative for stabilizing Home Capital.

But since then, ISS said, the company has made substantial progress such as board and management renewal, Ontario Securities Commission and class action settlements, asset sale, dividend suspension, repayment of Berkshire’s line of credit and restoration of deposit inflows to historical averages.

Still, longtime shareholder Ken Alexander voted in favour of giving Warren Buffet a bigger piece of the company to buy Home Capital more stability.

“He’s had such a wonderful track record, over the years,” Alexander said. “I don’t like to see Americans controlling a Canadian company, but I think he’s the best one for it.”

Donald Johnson, a member of BMO Capital Markets’ advisory board who initially reached out to Buffett on behalf of Home Capital, said he was surprised at the proportion of voters who turned the deal down.

Johnson said the short-term pain for shareholders would be outweighed by the benefits of giving Buffett a nearly 39% stake.

“That way, if the company owned that percentage of the company, they would definitely be there in the long term and provide any assistance, support,” he said.

Johnson, who met Buffett more than 20 years ago, said he would be surprised if Berkshire attempted to increase its stake in the future after being turned down this time.

When asked whether Berkshire could decide to sell off its existing stake, Johnson said it’s a “possibility. Time will tell.”

Analysts viewed the vote against Buffett’s second tranche, and its dilutive effects, as positive.

“We view this as a favourable development,” said Cormark Securities analyst Jeff Fenwick in a note to clients. “While HCG has faced significant challenges in 2017, a lack of equity was not one of them.”

GMP Securities analyst Stephen Boland told clients that it believes Berkshire “remains committed as a long term 20% shareholder, despite having the second tranche voted down.”