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LONDON, Dec 19 (Reuters) - Shareholders criticised the London Stock Exchange’s board on Tuesday for its handling of a row with activist shareholder TCI over the future of the company’s senior management.
British hedge fund TCI Fund Management, a 5 percent shareholder in LSE, has been pushing to oust Chairman Donald Brydon over his role in deciding on the succession to Xavier Rolet, the group’s former chief executive who resigned last month, a year earlier than planned.
TCI, founded by Christopher Hohn, had accused the board of forcing Rolet out and demanded a shareholder meeting to remove Brydon.
LSE shareholders voted at the extraordinary general meeting on TCI’s resolution. It called for Brydon to step down over his handling of the departure Rolet.
“This is a very sorry affair, which has brought considerable opprobrium on the company,” Aubrey Franklin, a small shareholder of over 20 years who backed the resolution, told the meeting.
The TCI resolution is expected to be defeated after a string of institutional shareholders such as BlackRock and Aviva said they would vote against it. The result will be published later on Tuesday.
“It seems to me the old boys network has got together and the establishment is winning out,” Franklin said.
Paul Heiden, a senior LSE non-executive director, said the board unanimously backed Brydon to remain in his post until the annual meeting in 2019.
The sudden loss of the chairman would be destabilising for the exchange, Heiden said at the meeting.
David Warren, interim chief executive, told the meeting the exchange was extremely well positioned to continue to grow under the strategy put in place by Rolet.
“The group continues to perform well across all main businesses,” Warren said.
The board was asked why Rolet quit early, rather than stay until the end of 2018 as originally planned to give time for the new CEO to be appointed.
Heiden said Rolet was asked to step down early after relations between himself and senior management “became fairly strained.”
TCI founder Hohn did not attend the shareholder meeting.
Reporting by Maiya Keidan and Huw Jones. Editing by Jane Merriman