Harland Simon investors to meet

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The Independent Online
INSTITUTIONAL investors in Harland Simon, the troubled control systems group, will meet today to decide whether to take action against its management, whose credibility has collapsed almost as far as the company's share price.

The pounds 6.3m loss that Harland reported two weeks ago was nearly pounds 20m below the result the City was led to expect before a February profits warning. The company's share price has tumbled from 655p to 37p amid growing concern about Harland's complex relationship with Perfect Information, a loss-making start-up providing an on-line news cuttings and financial information service.

Investors are angry that the market value of the company has crashed from more than pounds 100m to pounds 6.5m in less than six months. Two briefings for analysts since the results have failed to lay concerns to rest.

One analyst said the first meeting had been 'diabolical', Harland's management providing few answers to the most important questions surrounding the company. Some have criticised this Monday's briefing for providing too little opportunity for questions.

It appears that Harland is having difficulty securing large orders because of the uncertainty. Despite its assurances, some believe the company may be forced to make further exceptional write- offs.

Today's meeting of shareholders has been called by Electra Investment Trust, which has a 7 per cent stake. Edward Bonham-Carter of Electra said the institutions wanted to be satisfied that Harland was going to survive, to examine the credibility of its management, and to consider whether they could do anything 'to add value to what we have got left'.

Although Harland's chairman and finance director have been replaced since February, neither post was filled by an external appointment.

David Mahony has resumed the chairmanship he held for most of the past 12 years.

In two weeks shareholders will have an opportunity to vote Mr Mahony and George Neophitou, finance director, off the board. However, at least one large shareholder, CIN, doubts whether there is time to find suitable replacements.