The chairman of credit card insurer CPP has written to shareholders advising them to vote against a move by big investor Schroders to oust senior board members.
Schroders has proposed removing the company’s CEO Stephen Callaghan and the non-executive directors, who include chairman Roger Canham, Shaun Astley-Stone and Abhai Rajguru, and to replace them with Sir Richard Lapthorne, Nicholas Cooper and Mark Hamlin.
Mr Canham told shareholders: “The board was surprised by the requisition given that the company’s overall performance has been strong and significantly ahead of previous market expectations and also given that the share price has risen strongly over the past 12 months, seeing the company move from a market capitalisation of approximately £9.7m at December 31, 2014 to a value of £106.6m at the end of 2015.
“Adjusting for the net equity capital raise of £18.5m in February 2015, this represents an increase of £78.4m or approximately 278 per cent growth.”
Shareholders will vote on Schroders’ proposals at a general meeting on May 5.
Last month CPP said it made “significant progress” in 2015 as it returned to the black. The York-based firm made a £20.8m profit in 2015, up from a loss of £6.7m in 2014.
The firm was fined £10.5m in 2012 for misleading customers into buying worthless insurance for credit cards. Following discussions with the FCA, the company has been told it must demonstrate that management practices and shareholder influence of the past no longer exist, before reinstatement of regulatory permissions in the UK will be considered.
CPP said this is a key part of its plans and said they would be severely undermined if the Schroders’ resolutions are passed and if former chairman Hamish Ogston was to make a return to the board.