Hostilities brought to an end at Eurotherm

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The Independent Online
Hostilities were finally brought to an end yesterday in the personality clash that has split the board of electronic equipment maker Eurotherm throughout the summer.

Five weeks after chief executive Claes Hultman was forced out by non- executive directors he was officially returned to his post by supportive institutional investors, including the Prudential, MAM and Schroders.

Jack Leonard, chairman, paid the price for Mr Hultman's return by retiring seven months earlier than he had planned. He is to be replaced by Sir James Hann, former head of Scottish Nuclear and currently chairman of Hickson International, the chemicals manufacturer.

Sir James said he had been approached about 10 days ago to try and resolve the "emotional" clashes between Eurotherm's board members ever since Mr Hultman was forced out of the company following a failed bid to oust Mr Leonard. He is understood to have considered all possible solutions including overruling the wishes of the rebel shareholders to insist on Mr Hultman's resignation.

There had been fears that bringing Mr Hultman back to the company would in effect present him with carte blanche to act as he wished. Sir James dismissed that possibility: "I believe Claes is a team player. He will act within strategic frameworks which have been agreed with the board. This is a significant company and it has got to be run properly."

It is understood that Sir James insisted on a commitment to the company from Mr Hultman. Some observers had suggested that having transformed Eurotherm over the past five years, boosting profits from pounds 7.2m to pounds 34.1m over that period, he might be unlikely to remain long after the bruising encounters of the past few weeks.

He said yesterday: "I am very pleased that matters have now been resolved and that I am to continue as chief executive. The company has enormous potential and I am committed to the growth of Eurotherm in the long term. I look forward to working with Sir James."

Sir James's apparently firm and independent hand soothed concerns in the City and the shares closed 15p higher at 550p. They had traded as high as 644p in May but tumbled to 515p after Mr Hultman's unexpected resignation on 4 July.

An institutional investor involved in the talks denied yesterday that a small handful of powerful funds had effectively dictated the return of Mr Hultman.

He claimed that representatives of funds holding more than 50 per cent of the shares had been present at the protracted negotiations to reinstate the chief executive and said the whole affair could very easily have been avoided if all the parties involved had discussed the problems before it blew up into a full scale row.

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