Mutuals turn up the heat on would-be carpetbaggers

Click to follow
Building societies yesterday called for stronger defences against carpetbaggers as they faced further attempts to force them convert to banks and distribute billions of pounds of reserves to members. As Andrew Verity reports, the societies fear continual carpetbagging will damage their business unless the rules are toughened.

The Building Societies Association (BSA) said renewed attempts by Michael Hardern, self-styled carpetbagger-in-chief, to be nominated to run in boardroom elections at three mutual building societies, posed the threat of continual disruption to their business for years to come.

The former royal butler this week announced he is seeking to run for election at Bradford & Bingley, Britannia and Chelsea building societies. Mr Hardern, who in July was overwhelmingly defeated in elections to the board of Nationwide, needs only 50 members to sign his nomination in order to run for a boardroom post.

Building societies believe there is little likelihood of Mr Hardern and his pressure group, Members for Conversion, getting elected. But they fear that the tiny number of signatures required makes it too easy for carpetbaggers to disrupt their business.

Adrian Coles, director general of the BSA, yesterday said: "There is no way of stopping Mr Hardern, who came bottom of the poll in the Nationwide elections, from getting publicity and trying to get 50 signatures. It seems a ludicrously small number for a building society with millions of members."

He added: "It is actually going to be difficult to run a mutual society if every year you have fundamental problems like this. Elections could happen in 1998, 1999 and 2000. You couldn't run the Scottish Parliament and the Welsh Assembly on the basis of a referendum every year."

In the run-up to the Nationwide board elections in July, building societies began urging Helen Liddell, economic secretary to the Treasury, to help defend their mutual status by toughening rules on elections to the board.

Mrs Liddell was asked to raise the required number of signatures on an election nomination from 50 to 350. She demurred, saying a change would make building society directors less accountable to the membership.

Kevin McGuinness, company secretary at the Bradford & Bingley, said accountability had been dealt with. "We already began last year to require directors to seek re-election. We want to see a more realistic number of members to be required to nominate someone for an election," he said.

Mr Hardern is understood to be running as a sole candidate and is asking for members to back his own decisions in nominating further candidates for election Without a majority, it is unlikely that Members for Conversion could force Bradford & Bingley's board to propose a vote on conversion, which would be accompanied by windfall shares worth approximately pounds 1,000 to every member.