Britannia blocks attempt to force conversion vote

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The Independent Online
BRITANNIA building society yesterday blocked an attempt to force it to hold a vote on becoming a bank on the grounds that it was legally invalid.

A resolution proposing that the board take immediate steps to convert and distribute free shares to members was tabled at the end of December by associates of Michael Hardern, the eccentric carpetbagger who twice failed to be elected to the board of Nationwide.

Graham Stow, acting chief executive of Britannia, said the society sought an opinion from Malcolm Waters, a leading QC specialising in building society law. Mr Waters said the resolution could be rejected because it bound the board to a certain course of action.

"It clashed with the fact that it is asking the board to do certain things which it can't do under the rules. It is not our role to fudge the society's rules in order to allow something to happen," Mr Stow said.

Under a 1973 legal decision - Hinkmott v Woolwich - building society members can only table resolutions to guide a board of directors. Resolutions cannot be used to force them to act.

Mr Hardern will still run for election to the society's board at its annual meeting on 26 April. Yesterday he said Britannia had "missed its date with democracy".

Calum MacLeod, chairman of Britannia, said: "We believe Mr Hardern is not suitable to serve as a director of Britannia. His wish to force the society to convert to a PLC is not in our members' interests, and the board therefore unanimously recommends members not to vote for him."

Britannia's decision puts a question mark over Mr Hardern's attempts to table identical resolutions at five other societies - Yorkshire, Chelsea, Leeds & Holbeck, Portman and Skipton.