Sir Ken faces fight at Morrisons

CRISIS-HIT supermarket group Morrisons is facing the threat of a boardroom coup led by deputy chairman David Jones to oust veteran company chief Sir Ken Morrison.

Jones believes he may have to go over Sir Ken's head to orchestrate a rebellion by institutional investors against Morrison as the only way to bring in outsiders to the board.

The threatened move lays bare the intensity of the battle being waged in the boardroom as Jones, the lone non-executive director, struggles to loosen Sir Ken's grip on the company after its catastrophic takeover of Safeway last year.

Financial Mail has established the identities of the people that Jones lined up to join the board, but whose appointments were vetoed by Sir Ken. They are:

? Susan Murray, 48, chief executive of the Advertising Standards Authority and former chief executive of Littlewoods Stores who is already a non-executive director of Imperial Tobacco and Enterprise Inns.

? Nigel Robertson, who held a senior role in Marks & Spencer's food operation before leaving to set up grocery home delivery operation Ocado. Last year, with bookstore founder Tim Waterstone, he bought the Early Learning Centre chain.

Just days before Morrisons' annual meeting in Bradford in May, Jones signalled to friends that he hoped to announce that Murray and Robertson were being recruited as non-executive board members. But Sir Ken, 73, refused to support the appointments.

Without naming Murray and Robertson, he indicated that they were not of the right calibre, though Murray sits on the board of two FTSE 100 companies and Robertson has an established record in food retail.

At the meeting, Jones said he hoped to be able to name new non-executives within four to six weeks. Now, with four weeks gone, Jones is expected to allow a further fortnight at most in which to find non-executives who are acceptable to both him and Sir Ken.

If the deadlock persists, Jones is likely to seek the support of institutions to force Sir Ken to leave the chair and take a notional role such as life president - or quit the company completely.

Sir Ken is said to be trying to find his own candidates, but Jones remains determined to bring in independent outsiders who would be prepared to stand up to Sir Ken.

A profits warning earlier this month - the fifth since Morrisons bought Safeway for £3.35bn last year --suggested the group might show a pre-tax surplus of as little as £50m in the year to next January. Now analysts fear that the company may cut its dividend.

Morrisons faces accusations that it failed to tell investors as soon as it realised that it was facing such a sharp profits shortfall. Morrisons denies the accusations, saying that information was given as soon as it was available.