Haines quits board of MGN (CORRECTED)

CORRECTION (PUBLISHED 24 OCTOBER 1992) APPENDED TO THIS ARTICLE

JOE HAINES, the former press secretary to Harold Wilson, resigned from the board of Mirror Group Newspapers last night in protest at the proposed appointment of a new management team, led by David Montgomery, the former editor of the News of the World and Today, and Lord Hollick, the Labour peer.

In a fax sent to Sir Robert Clark, MGN's chairman, Mr Haines said he objected to Mr Montgomery's appointment because it made him fear for the long-term future of the Daily Mirror, MGN's flagship title, as a supporter of the Labour Party.

Mr Haines crossed swords with Mr Montgomery a few years ago over the Mirror's policy of supporting a united Ireland, which Mr Montgomery, a Protestant Ulsterman, rejects. 'I do not find it tolerable to sit at the same table as that man,' Mr Haines said.

However Mr Montgomery's appointment is supported by Lord Hollick, the managing director of MAI Group and close adviser to the Shadow Cabinet, who has agreed to be a non-executive director of MGN. They will be joined by two other senior executives from the newspaper industry, who have been lined up as finance director and operations director.

It is understood that John Smith, leader of the Labour Party, has been informed of the appointments and supports them.

The appointments are backed by Arthur Andersen, the administrator of the Maxwell private companies, which control 54 per cent of MGN's shares, and a meeting of MGN's board today is expected to support the moves.

John Talbot of Andersen believes that the appointment of a new management team will instil confidence in the company, and could lead to a placing of the stake with institutional investors, so ensuring MGN's independence for the time being.

MGN is understood to have been approached by Lord Hollick and Hambros, the merchant bankers. They argued that the management of MGN lacked experience in running tabloid newspapers.

Hambros was supported by NM Rothschild, the merchant bank advising Arthur Andersen, which was concerned about the way MGN shares have drifted downwards after the initial excitement when they were relisted in July.

Mr Montgomery is a former trainee at the Daily Mirror who came to prominence at Rupert Murdoch's News International.

CORRECTION

We are happy to make it clear that John Smith, the Labour leader, has expressed no view, publicly or privately, on the proposed new management team, led by David Montgomery, at Mirror Group Newspapers. He has welcomed MGN's assurance that it will continue its traditional support for the Labour Party.

(Photograph omitted)