FE Gisborne, a shareholder attending GRE's annual meeting, expressed concern about the relationship between the two companies. GRE owns 10 per cent of Hambros and 22 per cent of Hambro Countrywide, the Hambros group's loss-making estate agency. GRE has also helped to establish Hambro Guardian Assurance, a life office tied to the estate agents.
Mr Gisborne said that with Hambro Countrywide losing money and paying only a nominal dividend, 'you have set up a competitor to GRE with your expertise and with no return on its investment'.
Sid Hopkins, GRE's chief executive, said the insurer was receiving a very good return from the fees it receives on the business sold by Hambro Guardian. However, Hambro Guardian is to take over its own insurance administration from October, limiting further payments to GRE.
Mr Hambro also 'very definitely' rejected a call for the resignation of Mr Hopkins. Hugh Beaumont - who used to sell life insurance for GRE and is now disputing commission payments with the company - suggested Mr Hopkins should consider his position because of the hundreds of millions of pounds of losses and 'many scandals that affect policyholders' that the insurer has suffered in recent years.
Mr Gisborne asked about the pounds 80m that GRE advanced from its life fund to associates of Vinodchandra Patel, a former star salesman who, as recently reported by the Independent, was on close terms with GRE's senior management. 'One wonders what other instances there are where such amounts have been advanced to individuals of small standing,' Mr Gisborne said.
Mr Hambro said GRE was pursuing all avenues to recover its money. The company has repossessed properties bought with the pounds 80m loans and has either sold them or is taking a rental income from them.
Mr Hambro said GRE had traded profitably in the first quarter and expected much better results than in 1992, when it made a pounds 3m profit. GRE had no plans to raise additional capital as Commercial Union and Royal Insurance have done.