London Stock Exchange pushes forward with CEO succession amid investor backlash

LSE responds to investor's claim Xavier Rolet was 'forced' to leave

London Stock Exchange said it was following 'proper' procedures to find a new CEO (Reuters)

The London Stock Exchange Group (LSE) has assured that it is following "proper" governance procedures to replace its chief executive after facing fire from an activist investor claiming that Xavier Rolet was pushed out.

It came in response to a letter by Christopher Hohn, investment manager of The Children's Investment Fund Management (TCI), who said "it is clear" Mr Rolet had been "forced by the board to leave against his wishes".

The fund - which owns over 5 per cent of LSE - is now calling for chairman Donald Brydon's resignation, for Mr Rolet's contract to be extended and for the group to suspend the search for his successor.

In a stock market announcement, the London Stock Exchange confirmed it had received TCI's letter and said it was following the appropriate procedures.

"London Stock Exchange Group has followed a proper governance process to plan an orderly succession for the CEO," the group said.

"The FCA was kept informed throughout the process and emphasised the importance of the plan for an orderly succession.

"Xavier Rolet will be providing input into the process to identify his successor and is focused on his role as CEO until his successor is appointed."

TCI has said it "would expect to call" an extraordinary meeting for shareholders if the board does not "reverse its decision in the near future".

It intends to put forward a motion that would remove Mr Brydon and retain Mr Rolet as chief executive, who it said has created "enormous value" through acquisitions and "excellent operational management".

"We encourage all shareholders to promptly make their views known to the board," TCI said in its letter.

The London Stock Exchange Group last month announced Mr Rolet would be standing down in 2018 after nearly a decade at the helm, during which time its stock market value has soared from £800m to nearly £14bn.

His tenure has seen the LSE seal a string of acquisitions, although it was marred by the recent failed attempt at a £21bn merger with German rival Deutsche Borse to create a European trading powerhouse after it was blocked by the European Commission in March.

This marked the third doomed attempt at a tie-up between the two companies after previous setbacks in 2000 and 2005.

Before the LSE Group, Mr Rolet held a number of senior posts at failed investment bank Lehman Brothers, most recently as chief executive of its French operation.

He also previously held senior positions at Dresdner Kleinwort Benson, Credit Suisse First Boston and Goldman Sachs.

PA