Foreigner sparks Clark rebellion

A PROPOSAL to attract a foreign equity investor into C&J Clark, Britain's leading shoe manufacturer, has emerged as one of the key reasons behind a shareholder rebellion at the privately owned group, writes Neil Thapar.

The plan aims to attract a large investor to provide between pounds 20m and pounds 40m for Clark in return for a stake of up to 20 per cent. The details have come to light in a a letter posted to shareholders this week by a group of dissidents who are opposed to the plan.

The rebels are seeking to remove Walter Dickson, Clark's chairman and Jim Power, a non-executive director, at a shareholders' meeting on 16 October.

The dissidents revealed that early in 1992 the chairman, supported by the company's executive board, had proposed to bring in a large foreign equity partner. The proposal was formally presented to the board with the assistance of the company's advisers.

The letter says: 'It was explicitly stated by the chairman that without this equity injection the company would be likely to fail.'

According to the dissidents, who include several Clark directors, the funds would be used to promote the company's brands and pay for a rationalisation. But the rebels are resisting because it would dilute existing shareholder interests. The company is 70 per cent controlled by 500 members of the Clark family.

They also believe the plan would not improve its trading performance. Earlier this week Clark announced 170 job losses.