If De La Rue (DLAR) losing the UK’s post-Brexit passport contract wasn’t embarrassing enough, it’s now embroiled in a public spat with its second largest shareholder. Both chief executive, Philip Rogerson, and chairman, Martin Sutherland, are already on their way out after a dismal year. Mr Rogerson’s retirement announcement came in June but hinges on him finding and integrating a new chief executive. But unless he departs either at or before the AGM on 25 July, activist invest Crystal Amber Fund (which holds a 6.4 per cent stake) is threatening to requisition an extraordinary general meeting to install its preferred candidate. Asked about the sense of urgency, the fund’s manager, Richard Bernstein, said: “[w]e don’t think his judgement is very good. Frankly, we think he talks nonsense.”
The fund holds Mr. Rogerson responsible for “continued destruction of shareholder value”. Since becoming chairman in 2012, the share price has plummeted from over £10 to under 300p. He is blamed for sabotaging a takeover approach in June, allegedly reneging on an agreement to engage a “leading industry player”. De La Rue claims the prospective acquirer never responded to Mr. Bernstein’s introductory e-mail.
Mr. Sutherland doesn’t escape their ire – his £197,000 bonus from last year is perceived as reward for non-performance, especially given the £18.1m write-off of outstanding balances from the Venezuelan central bank. “Look at their judgement”, says Mr. Bernstein. “Whilst others knew sanctions were coming and stopped doing business there, De La Rue continued to print banknotes”.
So, who will blink first? Mr. Bernstein sounds confident. “Last time we were here was March, when, as a 6.5 per cent shareholder in Northgate (NTG), the chairman resigned before the meeting. I think we have the arguments and the evidence.” But the beleaguered banknote printer remains defiant. Dismissing the fund’s proposal as “precipitous and destabilising”, it has defended its succession plan, remuneration policies and communications transparency. It claims Crystal Amber’s actions are “very clearly not in the best interests” of the company. Shareholders are being urged to vote in favour of all AGM resolutions, including the chairman’s re-election.
