Activist shareholder Sir Chris Hohn today upped the stakes in his battle with the London Stock Exchange (LSE) Group, requesting an extraordinary shareholder meeting as part of a dramatic bid to remove chairman Donald Brydon.
Hohn, head of The Children’s Investment (TCI) fund, believes Brydon is forcing out LSE chief executive Xavier Rolet. He has launched a campaign to keep Rolet as the head of the FTSE 100 company.
In a hard-hitting letter sent today to the LSE, Hohn claimed Brydon has “failed to provide shareholders with any substantive basis for the removal of the chief executive” and accused him of poor corporate governance for allegedly gagging the chief executive.
Read more: London Stock Exchange’s Rolet being pushed out claims Sir Chris Hohn
He wrote: “Hiding behind confidentiality agreements denies shareholders the ability to review your actions and demonstrates the bad corporate governance over which you are presiding.”
Hohn has previously claimed that Rolet has signed an agreement not to publicly discuss the reasons for his departure, which was announced last month.
The LSE has denied that its governance was in any way improper.
TCI’s resolutions to be voted on at the meeting include the removal of Brydon as chairman and the immediate termination of a search for Rolet’s replacement. If the resolution were passed Rolet would then be allowed to continue as chief executive until 2021, subject to his consent.
As the owner of more than five per cent of the company, TCI is entitled to request the shareholder meeting. The LSE has 21 days to call the meeting, after which it has a further 28 days to confirm the date.
Hohn will meet the board of the LSE next week, according to the letter.
Rolet, a former head of the French arm of the now-defunct Lehman Brothers, has presided over an extraordinary revival of the LSE’s fortunes.
Read more: Xavier Rolet’s departure comes at a delicate moment for London Stock Exchange
Shares have risen from well below 1,000p when he joined in March 2009 to over 7,500p this year. Meanwhile, LSE has become a financial powerhouse under Rolet’s leadership after a string of acquisitions which allowed it to broaden its reach into clearing and indices.
The investor, who was knighted in 2014 for services to philanthropy, is a veteran of activist campaigns. TCI this year was involved in a push for lower bonuses at car manufacturer Volkswagen and forcing French aircraft engine maker Safran to cut its bid for aeroplane seat maker Zodiac.
“TCI has no qualms about kicking up a stink,” said one City insider.
Hohn was also intimately involved in the ouster of the former chief executive and chairman of Deutsche Boerse in 2005, which prevented a merger with the LSE. Rolet revived efforts to join with Deutsche Boerse last year, but the £21bn deal was undone by opposition from the European Commission.
The LSE declined to comment.
Read more: Xavier Rolet under “confidentiality agreement” ahead of LSE departure