Investors put heat on Spring Ram

Click to follow
The Independent Online
LEADING shareholders in Spring Ram, which last week issued its second profits warning this year, are pressing for a non-executive chairman to be appointed, and for the resignation of at least one of the executive directors amid allegations that the group knew it might have to make a profits warning before its annual shareholder meeting last month.

Some of the largest shareholders are understood to be pressing for a non-executive chairman to take over from Bill Rooney, the founder of the company, although Mr Rooney would stay on as chief executive.

Shareholders have also suggested that Ron Farr, the head of the special products division, may have to take the blame for some of the group's problems and resign from the board.

Spring Ram has rejected both suggestions, saying they have not been discussed. However a leading shareholder said: 'The group has to recognise that it is owned by its shareholders and bow to the way shareholders would like it to arrange it affairs.'

Panmure Gordon, the group's stockbroker, is also pressing the company to split the roles of chairman and chief executive, something Mr Rooney opposes. The pressure from shareholders represents a recent change of heart - a few weeks ago, they were willing to let Mr Rooney continue in the combined role, because they feared he might quit the group if too much pressure was put on him.

The group is trying to recruit a new finance director and a second non-executive director.

A senior source has said that the board of Spring Ram knew that the problems at Regency Doors and Artisan Tiles, which were both mentioned in last week's profit warning, were worsening before the group's AGM on 26 May. At the AGM, Mr Rooney said profits would be higher this year than last, a projection that now looks unlikely. The profits warning came less than four weeks later.

Spring Ram has denied that there was a board paper detailing the worsening problems at Artisan and Regency presented before the AGM, but it has admitted that the two companies' management accounts were discussed at the meeting.