Kraft ruling forces top banker to abandon job at Takeover Panel
Thursday 27 May 2010
Peter Kiernan, the investment banker at Lazard, has been forced to withdraw his candidacy for the role of director general at the Takeover Panel after the watchdog criticised his client Kraft over broken promises during its £11.7bn takeover of Cadbury.
The banker had been due to take up his two-year secondment at the Takeover Panel on 1 March, but this was delayed pending the panel investigation into the U-turn made by Kraft concerning the closure of Cadbury's Somerdale factory, near Bristol.
During the takeover process Kraft vowed to keep the factory open, despite the fact that Cadbury had already set in motion the process to close the Somerdale facility, at Keynsham, and shift production to Poland with the loss of about 400 jobs.
However, just weeks after sealing the deal for the Dairy Milk maker in January, Kraft said it would close the site, which provoked a furious response from the Unite union.
Mr Kiernan will now remain at Lazard as a managing director in its UK mergers and acquisitions team.
The Takeover Panel said that he had withdrawn his candidacy following the resolution of its investigation into statements made about Cadbury's Somerdale facility during the offer by Kraft. Philip Remnant, the panel's current director general, has agreed to continue as director general until a replacement is found.
The panel's criticism of Kraft is understood to be the first time it has publicly censured a company since 2007. It concluded that the statements made by Kraft regarding the Somerdale facility were not prepared to the standards of its rule, which requires the highest standards of care and accuracy and that the information must be adequately and fairly presented.
However, the panel said it "accepts that Kraft held an honest and genuine belief that it could keep Somerdale operational".
Yesterday, Kraft said: "We regret that, once we had full information, it was not feasible to keep Somerdale open, as we'd originally believed possible. Even though we never made a promise or a commitment to keep the facility open, we recognise that our 'statement of belief' created uncertainty among Somerdale employees."
Kraft said it would not appeal against the panel's decision. The US giant said: "We believe it's best for everyone to put this matter behind us so we can focus our energy on doing what's most important now: Growing our combined business in the UK and working with others to redevelop the Somerdale site in a way that helps Keynsham continue to thrive."
When questioned by MPs over the closure of Somerdale in March, Jack Dromey, Unite's deputy general secretary, said that Kraft had been "utterly cynical to pretend it could reprieve the plant".
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