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Woodford slams Stobart board after bust-up

Woodford slams Stobart board after bust-up

Neil Woodford has called on Stobart chairman Iain Ferguson to resign, after a major boardroom bust-up at the firm. 

Last week the infrastructure and support services sacked its former chief Andrew Tinkler from its board amid accusations of a 'flagrant disregard for fiduciary duties'.  

In a statement, Woodford reiterated his desire for Ferguson to be replaced by well known retail boardroom veteran Philip Day. 

He also fired a broadside at the board for obstructing responsible shareholder behaviour.

'People often criticise fund managers for being absentee landlords and for failing to engage with boards appropriately. Yet, in this instance, Woodford [Investment Management] is being criticised for doing precisely that,' Woodford said. 

'We’re exercising our legitimate right as a shareholder (representing our investors) to seek to replace one member of the board, yet some members of the board, using the company’s resources, have sought to obstruct this process.

'We question its motivations for seeking to frustrate the appropriate behaviour of a responsible shareholder.'

Prior his sacking, Tinkler has been trying to oust Ferguson. He was said to have the backing of 20 fund managers and significant investors, including Woodford, who is the second biggest investor in the firm, with a 20.3% stake. His former Invesco Perpetual colleague Mark Barnett is the largest shareholder.  

In a letter to shareholders last Friday, Stobart described Tinkler's rebellion as going totally against the firm's plans to move away from from its 'entrepreneurial approach' and back to the original ethos of the business. 

However, Woodford believes a new chairman was needed to restore stability.

'I have been one of the largest shareholders in the Stobart Group for more than a decade. Recently I have become aware, with other shareholders, of board instability and have sought to address this privately. Once I became aware of these governance issues, I undertook extensive diligence in order to establish the causes of this instability,' he said.

'My motivation, as a leading shareholder has been to ensure that the company is able to continue to deliver great returns to all of its shareholders.

'Sadly, the noard has seemed determined to make this a public discussion and has wasted shareholder funds by employing lawyers that have made unfounded and ludicrous allegations against me and other parties.' 

He added: 'Throughout my time as a Stobart Group shareholder, I have been able to observe Andrew Tinkler as a senior executive. It is his creative and entrepreneurial leadership that has delivered shareholder value for Stobart Group. He is an unconventional, straight talking, honourable man.' 

Dubai-based Day is the CEO and owner of the Edinburgh Woollen Mill Group, which owns Peacocks, Jaeger, Jane Norman and Austin Reed. 

'[Day] has extensive experience managing and leading diverse businesses in challenging environments whilst delivering excellent returns to shareholders,' Woodford added. 

'I believe he will be a very strong and effective leader of Stobart group at a time when the business needs just that. Ultimately, I would like him to become chairman but that will be up to the board to decide.' 

 

 

 

 

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