Stock Spirits in more hot water with investors after board of directors appointments at AGM

 
Francesca Washtell
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Stock Spirits Group is the leading flavoured vodka producer in Poland, although it has a sizeable presence across central Europe (Source: Getty)

Shareholder dissent is brewing again at Stock Spirits, where several investors are "unhappy" with the drinks company's handling of two non-executive director (NED) appointments in May.

Two NEDs, former Heineken executive Alberto da Ponte and former PepsiCo executive Randy Pankevicz, were appointed to the Eastern European vodka maker's board at its AGM on 23 May.

However, Stock Spirits swiftly categorised the appointments, which had been pushed by 10 per cent shareholder Western Gate Private Investments, as "non-independent". It has also said it will find and appoint a further two independent NEDs to the board.

A source told City A.M. these factors and the upcoming NED hires would "significantly inhibit" the new directors' ability to influence a "culture of groupthink" on the board - which is what shareholders voted for at May's AGM.

Read more: Fresh ruckus in Stock Spirits shareholder showdown

By treating da Ponte and Pankevicz as "non-independent" board members, they will not able to sit on the audit, remuneration or nomination committees. In an interview with the Financial Times, chairman David Maloney also said the new NEDs would be asked to leave board meetings if commercially sensitive information was discussed.

It is understood that five shareholders are dissatisfied with the current status quo.

Several shareholder advisory groups, including the Pensions & Investment Research Consultants and Glass Lewis, deemed the two NEDs could be classed as independent.

Read more: Is the Stock Spirits activist investor rebellion an omen of things to come?

A spokesman for Stock Spirits said the search for the two new, independent NEDS was "ongoing". In a statement released after the AGM Stock Spirits said da Ponte and Pankevicz were not independent as they had been proposed by Western Gate, but said it looked forward to a "constructive working relationship" with the NEDs.

Western Gate, which is headed by Portuguese cash-and-carry tycoon Luis Amaral, has publicly criticised Stock Spirits' strategy for several months. The drinks maker is the largest supplier of spirits in Poland and the Czech Republic, but its revenues slid 10.3 per cent and pre-tax profits slumped 35.9 per cent in 2015 amid stiff competition in the drinks market.

As part of its turnaround strategy, the company is planning to increase its acquisitions in the European drinks market, which raised the ire of Amaral and drove Western Gate's shareholder rebellion.

Chief executive Chris Heath stepped down in mid-April as a result of the spat with shareholders and has yet to be replaced.

On 21 June, Stock Spirits announced it intends to pay a £20m special dividend on 27 July to investors registered on 7 July and that no further M&A activity will take place in 2016.

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