Corporate Services board faces axe

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The Independent Online
THREE OF the City's largest fund managers yesterday joined forces to eject most of the board of Corporate Services after the employment and training services company issued its second profit warning this month.

Mercury Asset Management, M&G and Schroders, which together control 31.59 per cent of Corporate Services, have called an extraordinary general meeting to remove the company's chairman, commercial director and three non-executive directors after losing confidence in them.

The drastic move followed just hours after Corporate Services warned that its operating profits for the year to December would be around pounds 20m. Just three weeks ago, the company said profits would be about pounds 33.5m - already well below market expectations.

Corporate Services shares lost almost 10 per cent of their value on the news, closing at 70p. They touched a high of 261p last year.

The shareholders are understood to have pressed for management changes after the first profit warning, but were unhappy at the pace of change. Roger Eden, the chief executive, resigned last Thursday but the chairman, Jeffrey Fowler, is believed to have refused to go.

The shareholders were also concerned about the lack of information put out by the company and its advisers, Investec Henderson Crosthwaite, after the profit warning.

Michael Davies, the non-executive chairman of National Express, the trains and buses group, has been lined up to take over as a director of the company.