Grid backs chief after revelation of office affair

National Grid, the electricity generator, publicly backed its chief executive yesterday after revelations that he had an affair with a member of staff. The company said there was no question of him resigning.

Roger Urwin, 55, has also been cleared of an allegation of misuse of company funds after an accusation, made at a shareholders' meeting last week, that he had used company resources to enable the woman to accompany him on a business trip.

National Grid further denied that the revelations would have any impact on its £13bn merger with Lattice, the gas transportation business. The deal is "wholly on track for completion in the sutumn," the company said.

A spokesman for National Grid said: "Roger Urwin has a distinguished track record in the electricity and has been instrumental in building National Grid into one of the UK and the world's top companies. The board strongly endorses his performance as a director and chief executive of the company and shareholders voted overwhelmingly to reappoint him at our recent shareholders' meeting."

The company added: "We can confirm that the company has investigated the specific allegation [about the misuse of company funds] and we are satisfied that there were no improper expenses incurred in this context." The company denied that other issues were being investigated.

Lattice also attempted to play down the episode saying: "It is a personal matter which has no impact on the merger."

The revelations were made last Tuesday at National Grid's shareholder meeting in Birmingham which had been called to approve the Lattice deal. During the question and answer session one shareholder stunned the 300-strong audience when he approached James Ross, the company's chairman, and said: "Were you aware that he [Mr Urwin] had pursued an affair with my ex-wife?"

As Mr Urwin sat in silence Mr Ross replied: "I find it hard to consider this a proper subject for a business meeting."

It is understood that the shareholder's marriage to the woman had already broken down before her relationship with Mr Urwin began. The relationship is now over. Mr Urwin has since moved out of the family house in Kidderminster and is living in London.

Though National Grid's merger with Lattice has been approved by both sets of shareholders it could still be broken up by a rival offer for Lattice. However, there is a break-fee of £60m and National Grid's advisers pointed out that no other bidder had stepped forward so far and was unlikely to do so now.