Stobart Groups crisis ignites the governance tinderbox

Now things are getting messy.

If the situation wasnt already heated enough, Stobart Groups decision yesterday to oust former chief executive Andrew Tinkler as a director and sue him for breach of contract and fiduciary duty has ignited a tinderbox beneath one of the Citys most combustible boardrooms.

The allegations – that Tinkler sought to structure corporate deals for personal gain and “to secure control of the company – are extraordinary. The former CEO has support from over 30 per cent of shareholders, including Woodford Investment Management, making it conceivable (if not probable) that he will succeed in getting rid of chairman Iain Ferguson at next months annual meeting.

Read more: Former chief executive Andrew Tinkler fired from Stobart board

Other independent investors will understandably want reassurance about future governance arrangements if that happens, particularly given that the retail billionaire Philip Day is both unproven as a public company director and a Woodford nominee.

It might not be a coincidence that consummate corporate pugilist Michael OLeary struck a deal for Ryanair to operate from Stobarts Southend Airport just as its boardroom is descending into outright war.

But Warwick Brady, the chief executive, cant have it both ways. On Wednesday, he said the Ryanair arrangement was evidence of his ability to deliver despite the fracas; yesterday, he insisted that Tinklers campaign threatened to destabilise the company. Either might be correct, but he needs to be consistent if he wants to preserve his chairmans job.

Literacy in Dartmouth

There are few more obvious bellwethers of an economy than the vibrancy of its recruitment market, so how about this for a post-Brexit bet on the City?

Sources say that Literacy Capital, the investment vehicle headed by Paul Pindar, is in advanced talks to acquire a minority stake in Dartmouth Partners, one of the City's top headhunting firms. Subject to any last-minute problems, the deal should be announced next week. It represents an intriguing vote of confidence in Dartmouth, whose classroom-to-boardroom approach has led to it sewing up exclusive relationships with a string of investment banks, private equity houses and law firms.

Following the deal with Literacy, Jess Watts, the former chief executive of recruiter R4S, will become chairman, while the former Purplebricks chief financial officer Neil Cartwright will take the same role at Dartmouth. The companys founder will remain in his post as CEO.

It looks like a well-timed transaction: the last three months have been Dartmouths strongest-ever in revenue terms, underlining the fact that Brexit has yet to seriously bite the financial services sector.

Theres no guarantee that that will continue, of course – the presence, or otherwise, of reassurance in an impending white paper on Britains future relationship with the EU will have a significant bearing on City contingency planning. Dartmouths decision to open a Frankfurt office last year looks like a smart bit of hedging.

Khans Three Lion Whip

Englands World Cup campaign kicks off in Volgograd in four days time, but recent experience watching the Three Lions in major tournaments suggests it might be more exciting to focus on the unfolding tussle over the ownership of Wembley Stadium.

Shahid Khan, the Fulham FC owner, has proposed a £600m offer to take control of the home of English football, but leaving the Football Association as the beneficiary of future hospitality revenues.

The suggestion that the FA will open the process to other bidders in the autumn misrepresents the situation: its already open, but with few obvious bidders able to deliver the commercial logic contained by Khans offer to base the Jacksonville Jaguars NFL franchise there.

Among other stakeholders, Sport England is said to have brought on board Hogan Lovells, the law firm, to represent it as the talks continue.

Read more: FA heads called to parliament to explain proposed Wembley sale

Its right that governance safeguards such as a golden share for the FA should be incorporated into any final deal, preventing Wembleys future sale to an undesirable buyer.

Equally, the governing body must not ignore the prospect of a windfall which, if invested wisely, could turn help turn England World Cup squads of 2030 and beyond into genuine contenders.

[contf] [contfnew]

CityAM

[contfnewc] [contfnewc]