MP pressed to split job at TransTec

Click to follow
GEOFFREY ROBINSON, the multi-millionaire Labour MP for Coventry North-West, is to be ousted as chief executive of TransTec amid shareholders' concerns about the engineering company's performance, accounting practices and strategy. He will remain as chairman.

Several large shareholders, disappointed with the Birmingham company's poor results and sliding share price, say they have pressed since 1992 to split the dual job.

Other investors have bailed out. 'We looked at the reports long and hard but at the end of the day we were not satisified,' said John Johnston, small companies investment manager of Scottish Amicable, a life insurance firm that sold its 3 per cent stake last year.

But Mr Robinson, 56, says the change is his idea. 'There's been no pressure from the investors at all. I volunteered to split the roles,' said the former chairman of Jaguar Cars and Meriden, the ill-fated co-operative that briefly made Triumph motorcycles.

However, one institutional investor worries that the chairman may still exercise too much power. 'If they don't get someone strong, Robinson could continue to dominate the company,' he said.

Mr Robinson said he 'can well understand those fears'. But 'I'm utterly committed to having a first-class man there.'

Mr Robinson admitted he applied new accounting rules early, after being 'caned' by one analyst, and said he would consider other changes to satisfy investors. The company has stopped using fair value adjustments - which can weaken a balance sheet while flattering profits - and has reduced the proportion of earnings based on management's evaluations of unfinished projects. While both were legal accounting techniques, some investors felt they made it hard to assess the group's performance.

TransTec's latest interim report revealed pre-tax profits of pounds 3m, down 46 per cent, prompting year-end forecasts to fall from pounds 11m to pounds 7m. The shares are trading at about 50p, down from a high of 105p.

The company has had trouble raising new money. It parted company with its brokers last year after a rights issue to finance a takeover was abandoned at an early stage.

The company's 1993 balance sheet reveals it has added little to the cash raised from shareholders, despite rapid growth. Richard Bernstein, an analyst at City Marketing, is advising clients to offload the shares.

The mini-conglomerate was cobbled together by Mr Robinson in 1991, through a reverse takeover of a company controlled by the late Robert Maxwell. Since then, it has bought more than a dozen businesses.

Mr Robinson concedes he has had difficulty explaining his corporate strategy to shareholders. TransTec is supposed to be a balance of automotive parts firms and niche engineering companies, but that has left it vulnerable to sector downturns - first in the motor industry and then in the aerospace business.

Despite the criticism, Mr Robinson enjoyed a 47 per cent increase in total remuneration last year to pounds 285,000. His successor may earn even more, as Mr Robinson insists he wants the best.

(Photograph omitted)