UPDATE 1-Phoenix not looking to control Dignity's board ahead of vote to oust chairman

(Adds Dignity’s and directors’ response)

April 6 (Reuters) - Dignity’s largest shareholder, Phoenix Asset Management, said on Tuesday it was not looking to control the funeral services company or its board as it seeks to oust the firm’s chairman at a vote later this month.

Phoenix, which holds just short of 30% of the London-listed firm, last month called for a general meeting to remove Dignity’s Executive Chairman Clive Whiley as a director and appoint the fund’s Chief Investment Officer Gary Channon as an executive director.

In an open letter on March 31, Phoenix had said it uncovered "very serious issues" in Dignity's prepaid funeral plan business, called pre-need, and was unhappy with how Whiley dealt with it.

Phoenix issued a statement on Tuesday following the letter and subsequent meetings with other shareholders to clarify it had no desire to control the board or bid for the company.

It also said if it lost the vote on April 22, Dignity would remove the fund’s board representative.

Dignity declined to comment on the matter.

Last week, Dignity recommended shareholders to vote against the resolution to remove its chairman, who was appointed in 2019, and said it was “unnecessary” at a time when the firm had been making progress towards a strategic review.

Dignity is also dealing with another potential probe by the country’s watchdog into the funeral industry and introduction of new regulations that could affect its pre-need business.

The company’s independent, non-executive directors said the sector’s consultation process with UK’s Financial Conduct Authority was “complex”.

“It is of the utmost importance that (is) considered and correct process is followed,” they said in an emailed statement.

The UK’s Competition and Markets Authority said in December it still has serious concerns about the lack of transparency in the sector and may consider conducting another investigation when the coronavirus crisis stabilises. (Reporting by Yadarisa Shabong in Bengaluru; Additional reporting by Pushkala Aripaka; Editing by Krishna Chandra Eluri)