Shareholders back boardroom coup
THE boardroom coup at CPP Group has been completed after the shareholders voted to oust the existing board and return control to founder Hamish Ogston.
The York-based finance group has been in turmoil for the last two months after Mr Ogston launched a bid to replace four directors, including chief executive Steve Callaghan. Mr Callaghan, a turnaround specialist, joined CPP in April 2015 but is now expected to leave the company.
Mr Ogston, who owns 43% of the group, stepped down from the CPP board in 2013 in the wake of huge fines for the company from the Financial Conduct Authority. He was supported in his boardroom battle by asset managers Schroders, which has 10% of the group, as he gained approval for the appointments of Sir Richard Lapthorne, Nick Cooper and Mark Hamlin as directors.
In a short statement issued to the markets, the company confirmed that four directors – Mr Callaghan, non-executive chairman Roger Canham, and non-executive directors Shaun Astley-Stone and Abhai Rajguru – are to be removed from the board with immediate effect.
CPP Group had been rebuilding after being badly affected by a mis-selling saga that threatened its future.
It was fined £10.5m by the Financial Conduct Authority in 2012 and paid out £65.8m in compensation to customers, leading to huge losses. In 2014 the group closed two UK offices and four overseas offices, found £20m of cost savings and raised £20m in equity funding as shareholders backed the turnaround plans.
The company’s board had sought a High Court injunction to block Mr Ogston from voting at the company’s extraordinary general meeting. However another major shareholder, Phoenix Asset Management, which has 39%, withdrew its support and decided it would abstain, rather than back the board, at the EGM vote.
Mr Ogston founded CPP in 1980 and it floated in 2010 at 225p per share before climbing above 300p. However its share price collapsed in March 2011, halving in value, and halved again in February 2012, before declining further and today closed just above 8p.
