Fund piles pressure on De La Rue with threat to oust chair | Business News
The banknote and passport printer De La Rue is facing a fresh round of boardroom upheaval amid a threat from a furious City investor to oust its chairman at an extraordinary general meeting.
Sky News has learnt that Crystal Amber, a prominent activist fund, has written to De La Rue to inform it that the fund intends to requisition an EGM unless Philip Rogerson steps down at or before this month’s annual shareholder meeting.
Mr Rogerson said last month that he would retire after overseeing the recruitment and integration of a successor to chief executive Martin Sutherland.
Both men are leaving the company following a dismal period for De La Rue which has included the loss of the contract to produce Britain’s post-Brexit passports, a string of profit warnings and an £18m bill which has not been paid by the Venezuelan government.
The FTSE-250 company has fallen by nearly 45% during the last 12 months and left it vulnerable to a takeover bid, according to Crystal Amber and other investors.
At Tuesday’s closing price of 292p, it now has a market capitalisation of just £308m.
A number of shareholders have expressed concern that Mr Rogerson plans to stay until a new chief executive is in place and are likely to support a move to oust him at an earlier juncture.
The warning from Crystal Amber, run by Richard Bernstein, gives De La Rue just ten days to decide on its response ahead of its AGM.
One source said on Tuesday evening that the activist’s demand was expected to be disclosed in its quarterly update to its fund investors this week.
Anger at De La Rue’s management has been brewing for some time, but has erupted in recent weeks following the disclosure of a £197,000 bonus awarded to Mr Sutherland for last year.
Mr Bernstein, who has already declared his opposition to Mr Rogerson’s re-election at the AGM, has a history of requisitioning shareholder meetings to oust board members.
He is understood to have an alternative candidate lined up to chair De La Rue, although he declined to comment on the person’s identity.
Crystal Amber is also thought to have urged Mr Rogerson and Mr Sutherland to explore consolidation opportunities for the company’s banknote-printing division, but become frustrated at a lack of progress.
The fund manager owns just over 6% of De La Rue, and has been embroiled in recent campaigns for boardroom and strategic change at Cenkos Securities, Allied Minds and Northgate.
De La Rue, which first printed banknotes in Mauritius 159 years ago, is one of the world’s oldest companies of its kind, but has had a difficult decade.
It narrowly fended off a takeover bid from France’s Oberthur in 2011, but investors who have stuck around since then have seen their holdings slump in value by more than two-thirds.
Last year, the company lost out on a £490m contract to print the new blue British passport to Gemalto, a Franco-Dutch rival.
The news sparked outrage from pro-Brexit politicians and prompted Mr Sutherland to promise a comprehensive appeal.
That appeal was abandoned just a month later following legal advice.
Mr Sutherland, who has run De La Rue since 2014, has also been forced to contend with an £18m charge for the unpaid Venezuelan central bank bill – a charge that Crystal Amber argues was not reflected in the calculation of his bonus.
Sources said that Mr Bernstein had twice written to Mr Rogerson seeking the repayment of the bonuses, but had not received a response.
De La Rue has had some positive news recently, announcing last month that it had been awarded a contract to jointly supply polymer for the Bank of England’s new £50 banknote.
The central bank said this week that the Second World War codebreaker Alan Turing would feature on the currency.
Crystal Amber declined to comment on Tuesday evening, while De La Rue could not be reached.