Big-hitters demanded sacking of Lawrence

Stock Exchange drama: Five City heavyweights gave chairman ultimatum - sack your chief executive or take the consequences yourself

SIMON PINCOMBE,

DIANE COYLE

and DAVID HELLIER

Five powerful City figures gave the Stock Exchange chairman John Kemp- Welch an ultimatum last month: sack Michael Lawrence as chief executive or take the consequences yourself.

The threat was made less than three weeks ago by a two-man team - known as the Rockley-Owen delegation. Lord Rockley is group chairman of Kleinwort Benson and Dr Martin Owen is chief executive of NatWest Markets.

The two said they were representing the views of a number of key City figures, including Nicholas Redmayne at Kleinwort Benson, Scott Dobbie of NatWest Securities, Andrew Buxton of Barclays Bank and Michael Marks of Merrill Lynch.

They saw Mr Kemp-Welch just before Christmas and told him that the current state of affairs could not continue. They told him that they were being advised by others and that there had to be a change in the "due process and consultation" of the Exchange.

Mr Kemp-Welch was unavailable for comment and Lord Rockley could not be contacted.

The confrontation escalated the battle between the City's old guard and Mr Lawrence, an outsider, which exploded on Thursday when the Stock Exchange ousted Mr Lawrence as chief executive.

As the smoke cleared last night names of a successor were already being mentioned. Giles Vardey, the 39-year-old director of markets, development and marketing and chairman of the influential markets committee, was being tipped as a possible internal candidate. Mr Vardey was formerly managing director of Swiss Bank Corporation.

Mr Lawrence's departure plunged the Stock Exchange into a fresh crisis.

Politicians from all the main parties yesterday called for an urgent inquiry into the dismissal.

Malcolm Bruce, the Liberal Democrat Treasury spokesman, said: ''The move clearly gives the impression of vested interests resisting change when change is necessary.'' Mr Bruce said the Stock Exchange board should not be free to take decisions that could be of huge importance to the City and the economy without being accountable to Parliament.

He found cross-party support among other committee members. Barry Legg, Conservative MP for Milton Keynes SW, said: ''When an organisation loses two chief executives, it suggests something is wrong with the organisation, not the individuals. Personality differences can usually be reconciled.''

Clive Betts, a Labour member, said: ''I want to be assured that we do not have people in charge of the Stock Exchange who are resistant to changes that are important for its future and the future of the City.'' He agreed that there seemed to be City vested interests trying to block essential reforms.

In the City it emerged that Mr Lawrence was sacked because he was costing practitioners too much money. While the brokers and big investment banks were not prepared to comment publicly on his sudden departure, privately they admitted that his relentless programme of change was threatening their profitability.

"Mr Lawrence was not pig-sticked because the City blue bloods didn't like him,'' insisted one senior broker. "Rather he tried to make too many omelettes and broke one egg too many in the process.''

The decision to press ahead with the introduction of an electronic ''order- matching'' system for share trading - to compete with the traditional ''quote-driven'' system - was the final straw which angered the mighty investment banks. But Mr Lawrence had already ruffled a broader City church with the introduction of "rolling settlement'' and the Alternative Investment Market, both of which hit brokers in their pockets.

In Westminster, MPs were sceptical about the Bank of England's ability to resolve the Exchange's problems. Mr Legg said: ''I am not sure the Bank of England will be forward-looking enough on this issue.''

Mr Bruce said: ''The Bank has not exactly covered itself in glory recently.''

However, Alistair Darling, the Labour Party's City spokesman, said yesterday: ''For its own survival the Stock Exchange needs to unite quickly around a strategy. It may be that the Bank of England should use its influence and knock some heads together.''

The Bank of England sees itself as a troubleshooter, helping a prominent City institution overcome a specific problem. Although it took responsibility for Crest, the new share settlement system, after the collapse of the Exchange's Taurus project, muscling in on the Exchange's core functions is not on its agenda. Ian Plenderleith, the Bank of England executive director who has joined the Stock Exchange board as deputy chairman, is likely to see his top priority as restoring members' confidence in the Exchange after this latest debacle.

The Bank of England Govenor, Eddie George, said: "What is important is that people should be persuaded that the Stock Exchange has confronted clearly a problem and is going to address it in a constructive way."

Another priority is to move forward quickly with Sequence, the new trading system whose steering committee was appointed yesterday.

The Exchange hopes to introduce Sequence, in August this year.

Developed at a cost of pounds 47m it will replace Seaq, the system that launched the Big Bang in 1986.

It is designed to cater for any type of trading, including the order- driven system used on Wall Street and on the Continental bourses.

Lawrence interview, page 3

Comment, page 19

News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Sport
Romelu Lukaku puts pen to paper
sport
News
Robyn Lawley
people
Arts and Entertainment
Unhappy days: Resistance spy turned Nobel prize winner Samuel Beckett
books
PROMOTED VIDEO
News
people
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
News
i100
Life and Style
Phones will be able to monitor your health, from blood pressure to heart rate, and even book a doctor’s appointment for you
techCould our smartphones soon be diagnosing diseases via Health Kit and Google Fit?
News
people
Extras
indybest
Travel
Ryan taming: the Celtic Tiger carrier has been trying to improve its image
travelRyanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
Life and Style
Slim pickings: Spanx premium denim collection
fashionBillionaire founder of Spanx launches range of jeans that offers 'thigh-trimming construction'
News
Sabina Altynbekova has said she wants to be famous for playing volleyball, not her looks
people
News
i100
Life and Style
tech'World's first man-made leaves' could use photosynthesis to help astronauts breathe
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

BA/PM,EMIR/Dodd-Frank,London,£450-650P/D

£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...

Senior Analyst - ALM Data - Banking - Halifax

£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...

Java developer - Banking - London - Up to £600/day

£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star