PROPOSAL AMOUNTS TO ‘HOSTILE TAKEOVER’, SAYS WSR PLC
West Somerset Steam Railway Trust delays AGM after 14 prospective trustees propose merger with WSR Association to form new charity.
AT THE END OF THE DAY, THE MEMBERS WILL DECIDE WHETHER OR NOT THEY WANT TO ELECT THE TRUSTEES NOMINATED CHRIS AUSTIN, WSSRT
Agroup of West Somerset Railway members wishing to implement a restructure of the line have been described by the WSR plc as seeking a “hostile takeover”.
The West Somerset Steam Railway Trust announced on September 4 that it had delayed its annual general meeting, scheduled for September 19, until later in the year because 14 members and WSR volunteers had on the previous evening put themselves forward for election with the stated aim of merging the trust and WSR Association into a new charitable body.
As detailed in SR508, the report recently produced by North York Moors Historical Railway Trust chairman John Bailey on behalf of the Heritage Railway Association, regarding the WSR plc’s eviction of the Somerset & Dorset Railway Trust from Washford (see separate story) also recommended a new structure, with a charity leasing the line from Somerset County Council and a subsidiary operating company, in place of the current situation where the plc is the leaseholder and operator.
The report concluded that a successful outcome would be “a West Somerset Railway members’ charitable trust with a clear public benefit purpose able to fundraise with the benefit of charitable status” and “a financially sound subsidiary delivering a safe heritage railway nostalgic experience as a valued part of the local tourist economy.” It added that this could mean “the existing charities either (at their choice) subsumed into the main charity or free to continue within their limited charitable objects.”
Under the banner of ‘Pulling Together’, the 14 prospective trustees – Barrie Childs, Stephen Doughty, Martin Duff, Brian Fraser, Emma Haywood, David Horton, Colin Howard, Nigel Power, James Price, Jeff Price, Chris Ruddick, Seb Welsh, Robin White and Robin Wichard – proposed a conference of WSR groups and stakeholders, led by the trust and association, by October 2020 to “chart a path to implement the Bailey recommendations.”
Their aim is to achieve the merger of the trust and association, with the WSR plc as the subsidiary operating company, by the end of March 2021.
But their move drew a backlash from both the trust and plc, with the trust’s chairman Chris Austin stating: “This is not a simple process of putting a member up for election, but a concerted attempt to effect the merger of the WSSRT with the West Somerset Railway Association, even though that is against the wishes of our volunteers and trustees.
“We are a small charity with some very specific objectives around running the museums, educational outreach to schools and historic carriage restoration. Our view as trustees, after taking soundings with our members, is that we want to continue this good work.
“In his report, John Bailey accepts that we should be free to continue with our limited charitable objects, so it would be wrong to suggest that Bailey requires us to be folded into a single support charity. He does not.
“That is why we have deferred the AGM to allow us to take advice on the unprecedented number of trustee nominees, to consult with other parts of the railway, given the major effect such a change would have on them, and to consider the issue properly.
“No new AGM date has yet been set, but we will announce a new date as soon as we are able to, and at the end of the day, the members will decide whether or not they want to elect the trustees nominated, including two existing trustees.
“As a trustee, I have a duty to act in the best interests of the trust, but as someone who loves the WSR and has served it for 33 years, I will do everything in my power to resolve any difficulties to allow us to get back to our primary purpose of preparing the railway to reopen and to recover from this disastrous year.”
The plc declared that it “will do everything within its power to support the existing WSSRT trustees to repel this attempted and hostile takeover of a small, but widely respected charitable group which has supported the railway immeasurably, especially during the crises of recent years.
“As things stand, the takeover proposal would result in the effective destruction of the Steam Trust, so risking the future of the projects it has so successfully carried out to date. It would create huge uncertainty for its members too, all of whom have laboured successfully and hard to restore historic GWR coach No. 6705, transform the Gauge Museum at Bishops Lydeard, and engage with local schools. Steam Trust volunteers, who just want to get on with the work they enjoy doing in support of the railway, would end up as collateral damage in this plan.”
Stephen Doughty, one of the prospective trustees and a former chairman of the Swanage Railway, responded: “I can totally refute this; if you are elected as a trustee, you have an obligation and a duty of care to look after the trust’s objects.
“The Steam Trust has delivered its projects very well, and if our group is elected, we would want to see that good work continue – there’s no point doing this if we don’t add value.
“This whole issue is a matter for the members – and, with all due respect, we’re not sure why the plc feels it necessary to comment on the goals and objectives of the trust.”
A statement from the prospective trustees added: “Our additional objectives, aligned to the spirit of the Bailey recommendations, are complementary to the WSSRT’s charitable objective. We believe that by streamlining the complex structure and bureaucracy of the charities of the WSR, this will increase the fundraising potential for both the WSSRT and the WSR as a whole, encourage greater volunteer and community engagement, all of which will positively support the WSSRT’s existing charitable objective.”
By September 7, five of the prospective trustees – Robin Wichard, Chris Ruddick, Seb Welsh, Martin Duff and Colin Howard – had withdrawn their nominations “for personal reasons”, although Dee Childs then came forward as a further candidate.
The plc had previously stated that it “welcomed” the Bailey Report and “intends to commence a consultation process with its own shareholders”, but, in an update on August 21, it added that no restructure can go ahead until the railway has fully recovered from its current financial difficulties.
It said that it has been liaising with professional legal and
accounting teams (working free of charge), as well as Mr Bailey, to consider how the changes might be carried out.
However, it stated: “It is quickly emerging that cost is a huge hurdle that must be overcome before anything can happen. Initial research over the last few weeks indicates that we could be looking at a six-figure sum to complete the transfer of all plc assets into any new organisation and potential costs to TUPE [Transfer of Undertakings (Protection of Employment) Regulations 2006] employees into a new structure.
“The plc board are currently focusing their efforts on financial stabilisation and recovery from the Covid-19 impact, revisiting and revising their Safety Management System and undergoing an exercise to close out long-standing recommendations from the Office of Rail and Road. Therefore, the plc will wait until there is a strong revenue stream generated from an operationally compliant railway before considering expenditure on this project.”
Steam Railway has contacted the plc for further comment, while WSR Association acting chairman Mike Sherwood confirmed that its position regarding the Bailey Report remains the same as stated in SR508, namely: “We firmly believe that the only role for the WSRA is to fold itself into the proposed new charitable structure. In that event, all WSRA assets would be transferred to the new charity, and the WSRA would effectively cease to exist. To do anything else would preserve the current difficulties already articulated and would be sub-optimal.”