De La Rue hits back as investor tries to oust chairman

De La Rue’s largest shareholder is pressuring the firm’s chairman – Philip Rogerson – to step down at or before its annual general meeting this month.

Crystal Amber has written to De La Rue warning that it intends to requisition an extraordinary shareholder meeting if Rogerson (pictured below) doesn’t go, saying that since he became chairman in 2012 “shareholder returns are down by £529m: the equivalent of £143 for each minute of his chairmanship.”

The activist fund, run by Richard Bernstein, has previously called the company’s problems “self-inflicted”, insists it is now a takeover target, and has taken issue with the remuneration packages being offered to outgoing chief executive Martin Sutherland and Rogerson.

De La Rue responded today by recommending that shareholders “vote for all resolutions at the AGM, including the re-election of the chairman.” Rogerson has said he intends to retire but will stay on until a new CEO is appointed.

“De La Rue already has in place, and is progressing at pace, an orderly succession plan for the chairman, senior independent director and CEO,” said the company in a statement today.

“In stark contrast to the Crystal Amber proposal, this orderly succession plan helps ensure vital senior leadership continuity, at a time of significant and necessary change in the business, to help ensure the best candidates are attracted and appointed expeditiously to all three roles.”

A Sky News report has suggested that Bernstein already has an alternative candidate lined up to chair De La Rue but isn’t yet ready to reveal their identity.

Crystal Amber claims that Rogerson obstructed talks with a potential acquirer, although De La Rue says this was instigated by Crystal Amber in an email to both parties – and the unidentified potential acquirer “did not respond to that email."

The activist fund also says the company didn’t act on strategic acquisitions it recommended, but once again De La Rue insists it “considered fully and carefully these proposed targets and concluded that the proposals were of no strategic merit.”

De La Rue revealed a drop in pretax profits for the last financial year, despite a 12 per cent hike in revenues to £517m ($653m), although operating profit rose 6 per cent to just over £60m.

The company has said it is facing a tougher competitive environment – witnessed by the loss of a contract to produce the UK passport to rival Gemalto last year – but has also been hit by an £18m charge caused by the Venezuelan central bank being “unable to transfer funds due to non-UK related sanctions.”