All out war grips the Stock Exchange
Now chairman is accused of threatening the chief executive
The power struggle gripping the London Stock exchange escalated last night after a leading investor accused the company of mistreating departing chief executive Xavier Rolet.
In a furious letter to chairman Donald Brydon, Sir Chris hohn – founder of The Children’s Investment (TCI) fund – said that Rolet ‘is being improperly threatened by the board with severe reputational damage’.
hohn, who has a 5pc holding in the LSe, also warned that Rolet faces a possible ‘character assassination’ in a dossier due to be published by the firm in the coming days.
Warning Brydon that legal action could follow if ‘you were to put your personal interests before the interests of the LSe as a whole’, he even called on the governor of the Bank of england and regulators at the Financial Conduct Authority to order the board to find a new chairman.
The intervention marks yet another twist in a bitter row that has erupted at the top of the LSe in the wake of its failed £21bn merger with German rival Deutsche Boerse.
Rolet, who has run the LSe for more than eight years, transforming it from a business worth £800m to a £14bn titan, announced plans to quit last month but refused to say why.
The departure of the 58-year-old Frenchman has caused a feud at the LSe with hedge fund tycoon hohn blaming Brydon and calling for him to be sacked as chairman.
he also called on regulators to ‘instruct the board to appoint a new chairman who should be tasked with solving this corporate governance crisis’.
But behind the scenes the LSe has been putting together a dossier on Rolet’s behaviour to defend itself about allegations that it had forced him to leave.
The LSe last night confirmed that the dossier would be sent to shareholders ahead of an extraordinary general meeting called by hohn to determine the future of Rolet and Brydon. In a letter to Brydon, hohn said: ‘It appears to us that Xavier Rolet is being improperly threatened by the board with severe reputational damage unless he immediately steps down or publicly confirms that he does not want to remain as chief executive.
‘It would be inappropriate for the board to undertake a character assassination of Xavier Rolet in the shareholder circular required for the upcoming general meeting. Such an approach will only serve to deter any senior managers from wishing to serve under you or the current board.’
hohn, who believes Rolet has been gagged, said: ‘his silence speaks loud and clear to shareholders that he wants to continue.’
hohn, 51, also accused Brydon of briefing against Rolet in the newspapers. Ramping up pressure on Brydon, hohn said: ‘The relationship between the chief executive and chairman has now deteriorated to such an extent that it is impossible for you both to have an effective working relationship.’
An LSe spokesman said: ‘In requisitioning the eGM, TCI triggered a process which we are now adhering to. The next step in that process is to issue a circular, in order that all shareholders have the same amount of information at the same time. As regards regulatory oversight, we have kept regulators abreast of developments throughout.’