Rebels close in on 'fat cat' directors

DIRECTORS of industrial group Chapelthorpe face a vote to remove them from office this week after an escalating war of words with rebel shareholders.

Activists with a 10.8% stake have accused the board of taking fat cat salaries and destroying shareholder value.

Second Advance Value Realisation and North Atlantic Value LLP want to oust chairman John Standen, chief executive Brian Leckie and directors Allan Thompson and Alan Reeve.

In their place, the dissidents want to appoint four directors headed by Ian Duncan, former finance director of industrial giant Tomkins. Their resolution will be voted on at an extraordinary meeting on Friday.

Duncan, who has worked in private equity since leaving Tomkins in 2000, said he believed there was value to be unlocked for Chapelthorpe shareholders.

The company, whose businesses include car seat fabrics, wallcoverings and an umbrella frame maker, is based at Wakefield, West Yorkshire. Its shares dropped below 6p in 2001, but have made up ground in recent years and closed last week at 20¼p to value the business at £41.3m.

But Duncan said he believed the shares could go higher if investors backed his team's strategy to sell businesses and property and return cash to shareholders. He added: 'Since Leckie and Thompson joined the board in 1997, the dividend has fallen. On top of that, £31m worth of acquisitions have failed to deliver, while they have been paid £5m in pay and pensions.'

A spokeswoman for Chapelthorpe said the board had delivered value to shareholders since 2002 and claimed that the rebels had changed their plans for the firm and were trying to gain control without tabling a bid.