Rebels in 'bloody' battle for the tunnel

A BATTLE between Britain and France for the control of Eurotunnel begins in earnest tomorrow when more than one million shareholders will receive letters from the board appealing to them to reject calls to sack all nine directors.

An emergency general meeting organised by rebel French shareholders to oust the British-led board and derail plans to refinance its £6.4bn of debt is set for Paris on 7 April. It promises to be one of the most bloody in years.

The rebels are led by a banned director with criminal convictions for fraud and theft. Nicolas Miguet, a right wing failed presidential candidate, millionaire publisher and internet tycoon, was found guilty last month of defaming Eurotunnel's chief executive, Richard Shirrefs. Miguet had accused Shirrefs of being a 'yob, riff-raff, swine, and a con artist'.

The French judge presiding over the case described Miguet as acting like a 'delinquent' who was ready to resort to extreme means. He ordered Miguet to pay £6,800 in damages.

Last year, Shirrefs issued a statement to the London Stock Exchange saying that 'Miguet has been criminally convicted for the unlawful exercise of a directorship of a company, misuse of its assets or credit for his personal benefit, theft, fraud and attempted fraud'.

The Eurotunnel camp has also drawn attention to the fact that one of the new directors being proposed by Miguet is Herve Huas, 50, a former board member of Dexia bank, who is facing damaging charges of money laundering in France.

But Miguet claims to represent more than 13% of the one million-plus individual shareholders who control 60% of the company.

That is why the Eurotunnel board is alerting shareholders that they 'run the severe risk of leading the company into an extremely difficult situation, which could well result in shareholders losing their entire investment'.

The rebels are opposed to Eurotunnel's rescue plan, codenamed Galaxie Project, which will see it slash its £6.4bn debt. The non-executives, four British and five French, state they are unanimous in their support of management.

Shirrefs said: 'We are fully convinced that the Galaxie Project gives our shareholders a real hope of seeing Eurotunnel emerge once and for all from our financial problems.'

Eurotunnel revealed a full-year loss of £1.33bn last month, and called on the British and French governments to help broker a financial restructuring.