Succumbing to shareholder pressure, Keith Bradshaw, executive chairman, will step down immediately to non-executive chairman.
However, Mr Bradshaw, whose reluctance to give up control led to Mr Patel's departure, becomes acting chief executive pending a replacement.
In a carefully worded statement released yesterday after the market closed, Care First said that the board had unanimously voted that Mr Bradshaw resign as executive chairman and had "further agreed" not to reinstate Mr Patel. However it is understood that two executive directors, Tony Heywood, business development director, and Mr Patel himself voted for Mr Patel's reappointment and against Mr Bradshaw's role as acting chief executive.
The board vote came after meetings yesterday with the group's advisers, Collins Stewart and SBC Warburg.
Their report found that shareholders wanted either to reinstate Mr Patel and get rid of Mr Bradshaw completely or have Mr Bradshaw become non-executive chairman.
While Mr Patel was told that "a majority" of shareholders did not seek his reinstatement, the report did not indicate levels of support for each option.
An independent source called the news a compromise. "A large number of shareholders are very unhappy that Chai has gone. Many of them have talked about forcing an EGM. It is now just a question of whether they can organise themselves."
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