Collins Stewart chairman defends his independence in share options row

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The Independent Online

Keith Hamill, chairman of Collins Stewart, the broker embroiled in a bitter legal dispute with a former employee, yesterday denied accusations that he and a fellow director had not acted as a proper watchdog on the board.

The move came after it emerged that Mr Hamill, who is non-executive chairman, and John Spencer, Collins Stewart's senior independent non-executive director, own share options in the company.

Current views of best corporate governance practice advise that non-executive directors should not own share options because the ownership of such shares or share options could compromise their ability to challenge the rest of the board if the need arises.

The issue is particularly sensitive for Collins Stewart because it is in the middle of an increasingly vitriolic dispute with James Middleweek. The independent brokerage's former analyst has accused the company of trying to ramp its own share price and of condoning practices such as insider dealing.

Mr Spencer, who has held a series of high-profile jobs such as head of finance and planning at Barclays, was in charge of hiring Clifford Chance to investigate Mr Middleweek's allegations. The law firm returned a verdict that there was no evidence to support the charges.

Mr Spencer has options over 63,766 shares which he will be free to exercise from 15 October as long as Collins Stewart achieves a return on capital targets.

But Mr Hamill, who is also chairman of the nightclubs owner Luminar and Moss Bros, said the suggestion that the options may have clouded Mr Spencer's judgement was "laughable". "I am confident in my ability to manage this situation," Mr Hamill added.

He also countered the view of some corners of the City that the rest of the board did not stand up to Terry Smith, the straight-talking chief executive of Collins Stewart.

The company, which denies Mr Middleweek's allegations, confirmed it had now issued its writ against the Financial Times, which it accuses of "hatchet job" reporting on the situation. Collins Stewart's shares resumed their slide, closing down 24p at 403p.