Pressure mounts on Casey to quit after narrow escape in LSE revolt

STOCK EXCHANGE CRISIS: Brokers line up to lambast board members as Cruickshank promises 'to listen'
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The Independent Online

The future of Gavin Casey, the chief executive of the London Stock Exchange, was last night in the balance after a show of hands by LSE shareholders yesterday voted him out of office only to see the result overturned in a secret poll later in the day.

The future of Gavin Casey, the chief executive of the London Stock Exchange, was last night in the balance after a show of hands by LSE shareholders yesterday voted him out of office only to see the result overturned in a secret poll later in the day.

Brian Winterflood, chief executive of Winterflood Securities, said that following the public mauling Mr Casey received at the hands of LSE shareholders at the Exchange's annual meeting yesterday Mr Casey was "a busted flush".

"I think he has to resign," Mr Winterflood said. The view was echoed by Angela Knight, chief executive of Apcims, the private client broker lobbying group.

In a tense meeting in central London, shareholders vented their frustration at the board for the handling of the aborted merger with the Frankfurt Exchange by delivering a clear vote of hands against Mr Casey.

But Don Cruickshank, the London Stock Exchange chairman, insisted on a formal card vote. The result, which was made known later in the day, showed 56.3 per cent in favour and 43.7 per cent against, confirming Mr Casey in his post.

Nevertheless, a refusal by Mr Cruickshank to take the opportunity to accompany the announcement with a statement of support for Mr Casey merely added to the speculation that his days at the LSE were numbered. Mr Casey had in any case been due to leave if the iX merger had gone ahead.

In a brief interview after the result, Mr Cruickshank said: "There will be a number of issues which will be tackled in the defence document of which management is one. I cannot comment further."

Mr Casey, who had remained silent throughout the meeting in the face of repeated calls for heads to roll, was not available last night.

Mr Cruickshank, whose appointment needed formal shareholder approval, and Michael Marks, the head of Merrill Lynch Europe were also confirmed in their posts.

Mr Marks, Mr Casey and two other directors were up for re-election in line with usual corporate practice.

Mr Winterflood said his preferred candidate to replace Mr Casey would be a "young whiz kid familiar with technology". The remark prompted one of the advisers to OM, the Swedish Stock Exchange group bidding for the LSE, to quip that Per Larsson, the OM chief executive, would fit the bill. However, industry sources said finding a suitable replacement within the context of a hostile bid would not be easy.

OM sought to take advantage of the LSE's embarrassment attacking it for lacking a credible position on "management, strategy or technology."

Many worry that by seeking to force the Exchange's hand over Mr Casey, retail brokers may have unwittingly played into the hands of either OM or Deutsche Börse, the Frankfurt Exchange whose chief executive, Werner Seifert, is working hard with his advisers at Goldman Sachs and Deutsche Bank on a potential takeover bid.

In his opening speech Mr Cruickshank sought to counter suggestions that the LSE was sitting back waiting for others to decide its fate. "This is a strong company. It does not have to do deals," he said. "The London Stock Exchange, your company, is not up for sale." He also sought to regain the initiative by announcing the Exchange is to move proactively to remove the 4.9 per cent limit on shareholdings. OM has requisitioned a meeting to lift that cap without which its bid cannot succeed.

However, his attempts to rally support for a new vision of an Exchange which listened to its members fell flat. Brokers said that Mr Cruickshank's performance was disappointing.

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