Salvesen rebels mount new attack on board

The row over the future of Christian Salvesen, the Edinburgh-based transport and rental group, intensified yesterday after rebel shareholders rolled out James Grant, the former finance director of Lucas, to lead a new attack on board proposals to shake-up the group.

Mr Grant criticised the recent performance of Salvesen under current chief executive Chris Masters, saying the transport logistics side of the group had become "obsessed with cost cutting", and accused the Aggreko generator hire operation of complacency. He claimed that the rate of return at the group had sunk from 25 per cent to under 15 per cent over the past three years, below the cost of capital in the logistics division at least. Only they had "the vision, the strategy to produce growth", he suggested

But Salvesen, which yesterday published a circular outlining its plans to pay a one-off pounds 100m foreign income dividend as a precursor to demerging Aggreko, roundly denied the allegations.

Mr Masters said: "Aggreko is now a world leader in what it does. It was a major supplier to the Atlanta Olympics. To say it has become complacent is just simply untrue."

He also explained that the return on capital in logistics had fallen recently because Salvesen had invested over pounds 100m in the business over the past three years, which inevitably depressed returns. But he went on: "The key issue is that the days when logistics was all about trucks and warehouses are gone. Now managing the supply chain is about [information technology] systems ... and for that reason it is becoming less capital intensive."

He said suggestions by the rebels that the group should buy rivals did not make sense. "I simply do not see it as a tenable strategy to buy more transport businesses."

Mr Grant spent 25 years with Jaguar before being part of the team that helped turn round Lucas, which recently merged with Varity of the US. The rebels, led by Sir Gerald Elliot, a former Salvesen chairman, plan to unveil their own business plan for the group early next week.