By Mark Kleinman, City Editor
Len Wardle, the chairman of the Co-operative Group, is to quit the mutual amid a crisis that is poised to leave American hedge funds in control of its banking arm.
Confirming a Sky News report on Tuesday that Mr Wardle plans to inform Co-operative members of his plan to step down at the Group's half-year meeting on November 2, he said he would encourage its millions of members to appoint an independent chairman for the first time.
Mr Wardle, who will leave next year, has chaired the Co-op - which has an empire comprising funeralcare, pharmacies, legal services, supermarkets and banking - since 2007, but stepped down from the board of its banking division last month.
A former Labour councillor, he was among the enthusiastic backers at the Co-op of its proposed takeover of 632 Lloyds Banking Group branches, a deal which collapsed earlier this year because of a £1.5bn black hole in the balance sheet of the Co-op Bank.
"On 2 November I intend to give the membership my notice that I will relinquish my Chairmanship in May 2014," he said on Tuesday.
"In August this year, I informed the Board that it was my intention to step down at the end of my term of office whilst also making clear that I wanted to drive hard the reforms to modernise the Group. During the last year, we have appointed Euan Sutherland as Group CEO and started the changes that I believe will make The Co-operative Group stronger than ever.
"The Co-operative is at its best when it is reforming and I want this change to continue. I want to persuade our members that The Co-operative Group should now look to an independent chair to lead the business, working side-by-side with the members who represent the movement."
In an article earlier this year, Mr Wardle told Co-op members he understood misgivings about relinquishing control of a shareholding in the bank.
"Let me reassure you that the decision to seek a listing for the ordinary shares of the Bank was not taken lightly, but was approved at Group Board level, following a recommendation from the Banking Group Board, and only after very detailed consideration of all the other options open to us," he wrote.
Since then, the Co-op has been forced to agree a more radical restructuring of its bank, ceding ownership of 70% of the shares to hedge funds and other investors.
Earlier on Tuesday, the Group's former chief executive, Peter Marks, was grilled by MPs on the Treasury Select Committee and faced accusations that he was passing the buck for the troubles at the Co-op Bank.
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