'Time's up' for chief of Jarvis

Shareholders seek removal of Kevin Hyde at services group. Clayton Hirst reports
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The Independent Online

Shareholders in Jarvis, the support services company, are pressing for the removal of its chief executive, Kevin Hyde.

Institutions believe he has been too slow in addressing the deep-rooted problems at the company. Some now consider that his replacement represents the best chance of wiping the slate clean after a torrid 12 months for Jarvis.

"Kevin Hyde's time may be up. I can't see how he can survive," said one investor.

Not only has Jarvis accepted liability for claims brought by bereaved relatives and those injured in the Potters Bar rail crash, but it has been slated for a series of overruns on projects to renovate school buildings.

Shareholders have yet to approach its non-executive directors. Some are planning to wait until the company reveals the conclusions of its strategic review, which is expected to coincide with its financial results next month. Other longstanding investors are waiting to see if K Capital makes a move on Jarvis. The Boston-based hedge fund built up a 13 per cent stake in the company last week.

Another investor said: "If K Capital doesn't strike then we may have to take action."

Separately, Close Brothers is seeking to oust Mr Hyde and Jarvis's acting finance director, Alistair Rae. Close doesn't hold any shares in Jarvis, but it is acting for a possible replacement for Mr Hyde.

Close's initial approach to Jarvis's chairman, Steven Norris, was rejected last week. A source close to the company described the move as "cheeky" and "ambulance chasing". However, the bank is expected to begin canvassing support from shareholders this week.

A Jarvis spokesman said: "The board and the chairman have expressed full support in Kevin Hyde. He is carrying out the second phase of a thorough review of the company's activities to bring about change for the benefit of shareholders."

There was speculation last week that Jarvis may have to launch an emergency rights issue so that it can keep up with its interest payments.

However, it is understood that the board has not discussed any plans for a rights issue. Instead, the company is pressing ahead with a 50 per cent sale of its 33 per cent stake in Tubelines, one of the consortia running the London Underground. Jarvis is expected to announce details when it presents its results next month.

Mr Hyde was promoted from chief operating officer to chief executive in June 2003. Supporters say that he has already tackled some of Jarvis's biggest problems. Notably, he appointed Bombardier executive Andrew Lezala to head Jarvis's rail division. Mr Lezala has rebuilt relations with Network Rail and he is now tipped by some shareholders as a possible replacement for Mr Hyde.