Aryzta re­fuses to con­firm new di­rec­tor

Trou­bled bak­ery group stays silent as in­tended di­rec­tor faces in­sider trading in­quiry Firm an­nounced ap­point­ment of Metro’s Steine­mann sub­ject to agm ap­proval

The Irish Times - Business - - BUSINESS / NEWS - MARK PAUL Busi­ness Af­fairs Correspondent

Aryzta, the Ir­ish-Swiss food group chaired by Gary McGann, is de­clin­ing to con­firm if it still plans to put its new non-ex­ec­u­tive di­rec­tor, Jür­gen Steine­mann, up for rat­i­fi­ca­tion by share­hold­ers at next month’s agm, af­ter it emerged the Ger­man is the sub­ject of an in­sider trading in­ves­ti­ga­tion in­volv­ing re­tail group Metro.

Aryzta an­nounced the ap­point­ment of the vet­eran ex­ec­u­tive Mr Steine­mann in Au­gust, as part of Mr McGann’s ef­forts to re­new Aryzta’s board. The com­pany pre­vi­ously said his ap­point­ment would be put to a vote of share­hold­ers at the meet­ing on De­cem­ber 7th.

It has emerged in re­cent days, how­ever, that Mr Steine­mann is be­ing in­ves­ti­gated by pros­e­cu­tors in Dus­sel­dorf af­ter fi­nan­cial watch­dogs be­came sus­pi­cious over a share trans­ac­tion of his at Metro last year. He is the chair­man of Metro’s su­per­vi­sory board.

At the end of March 2016, Metro an­nounced it would split its con­sumer elec­tron­ics and food busi­nesses, send­ing its shares up by more than 10 per cent. How­ever, five weeks be­fore this, Mr Steine­mann no­ti­fied the mar­ket of his pur­chase of €1 mil­lion worth of shares in the busi­ness, which soared in value weeks later af­ter the split.

Share deal­ing

Pros­e­cu­tors are re­port­edly in­ves­ti­gat­ing what, if any­thing, he knew of the busi­ness split plan prior to his share deal­ing, and whether the an­nounce­ment of the busi­ness split could have been made sooner. The in­ves­ti­ga­tion is also fo­cus­ing on the deal­ings of a hand­ful of other ex­ec­u­tives at Metro, in­clud­ing its chief op­er­at­ing of­fi­cer.

Metro says there was no wrong­do­ing.

Aryzta de­clined to com­ment when asked yes­ter­day to con­firm its prior state­ment that Mr Steine­mann’s ap­point­ment would be put to share­hold­ers at the De­cem­ber meet­ing. It also would not com­ment when asked if he had warned Aryzta of the in­ves­ti­ga­tion of which he is sub­ject in Ger­many. He is not cur­rently listed as a di­rec­tor on Aryzta’s web­site.

It is ex­pected Aryzta will for­mally an­nounce the res­o­lu­tions for its agm next week. The com­pany could look to head off the is­sue, how­ever, with a sep­a­rate an­nounce­ment to in­vestors about the is­sues sur­round­ing Mr Steine­mann be­fore it an­nounces res­o­lu­tions.

The is­sue presents the first big cor­po­rate gov­er­nance test for Mr McGann, who was ap­pointed chair­man less than a year ago. At the time of his ap­point­ment, he was urged to “stamp his au­thor­ity” on Aryzta by an­a­lysts at Soc-Gen, fol­low­ing a tu­mul­tuous pe­riod un­der its for­mer chief ex­ec­u­tive, Owen Kil­lian.

Next month’s agm is also the first ma­jor pub­lic out­ing for Kevin Toland, who was ap­pointed in re­cent months to re­place Mr Kil­lian.

It also would not com­ment when asked if he had warned Aryzta of the in­ves­ti­ga­tion

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