Pressure on the board of the London Stock Exchange (LSE) over the departure of chief executive Xavier Rolet has ramped up again after a key investor wrote to the group’s chairman demanding that a confidentiality requirement be waived so the CEO can answer shareholder questions.
Sir Christopher Hohn, chairman of The Children’s Investment Fund, made the demand in a letter this week that also demanded answers to a list of questions for LSE chairman Donald Brydon.
The letter said: “Xavier Rolet is a key member of the Board and has been prohibited from communicating with shareholders as a result of the confidentiality agreement entered into. In order to meet your commitment of transparency to shareholders, the board must waive LSE’s requirement for confidentiality to allow Xavier Rolet to answer shareholders’ questions.”
Rolet resigned unexpectedly in October, though he was not due to leave until the end of 2018. The Children’s Investment Fund, one of the LSE’s biggest shareholders, has been campaigning for Rolet to remain in post until at least 2021.
The fresh correspondence comes as it was reported that a meeting between the LSE and Sir Christopher, due to take place this week in an attempt to smooth over the growing row, had been cancelled.
Sir Christopher’s latest letter to the LSE chairman asks for the “specific reasons that the board dismissed Xavier Rolet?”
The letter also asks if there were performance issues with Rolet and what they were. It demands to know if Rolet wants to remain in charge of LSE.
The letter demands disclosure of the severance agreement made with Rolet, and offers a robust reminder to the board of its responsibilities for such a payment.
“If it has been agreed that Xavier Rolet is to receive a ‘payment for loss of office’, please confirm when you will be seeking shareholder approval for such a payment? As you will be well aware, if a payment for loss of office is made without shareholder approval then all the Board members who approved the payment will be personally liable for these payments on a joint and several basis.”
Finally the letter ends with a request to know the succession plan for the LSE’s chairman.
On 9 November, the LSE posted a statement to the Regulatory News Service revealing that The Children’s Investment Fund had demanded the resignation of Brydon and the reinstatement of Rolet. The fund also called for an extraordinary general meeting.