Home Capital Group’s (HCG.TO) shareholders have voted overwhelmingly against the second tranche of Warren Buffett’s investment in the embattled lender.

88.79 per cent of votes were cast against the arrangement at a special meeting in Toronto on Tuesday.

The proposed $246.8-million investment would have seen Buffett’s Berkshire Hathaway boost its stake in the company to 38.39 per cent.

“This decision 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. We are pleased to still have Berkshire as our largest shareholder,” said Home Capital Chair Brenda Eprile in a press release.

The deal with Berkshire was struck at the height of Home Capital’s liquidity crisis earlier this year; but it’s been a source of conflict with proxy advisors split on the plan and some top shareholders speaking out against it.

“We’re thankful that the board found Buffett. We’re thankful that Buffett invested. We’re thankful that he owns 20 per cent [of Home Capital]. But things have corrected so significantly … that need for more capital is gone,” said Taylor Asset Management President and Chief Investment Officer David Taylor in an interview with BNN Tuesday.

“I know I have no problem with Buffett owning more stock. If he wants to buy stock, he can go out and buy it in the market.”

If the investment had been approved, Berkshire would have picked up an additional 23,955,420 shares in the lender at a price of $10.30 each.

Shares of Home Capital closed at $14.08 Monday and were little changed Tuesday at 12:20PM ET after the stock resumed trading.

The first tranche of Berkshire’s investment in Home Capital is unaffected by the vote.