Shareholders revolt over Spring Ram accounts

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The Independent Online
A NUMBER of shareholders in Spring Ram, the kitchens and bathrooms group rocked by controversy, are set to vote against approval of the group's report and accounts in Leeds on Friday.

Shareholders have told the Independent on Sunday that they are unhappy about the presentation of information in the accounts. They are also concerned at Spring Ram's apparent disregard for recommended standards of corporate governance.

Their opposition to the report and accounts is certain to cause embarrassment to Bill Rooney, the chairman and chief executive.

Mr Rooney is unlikely to deliver his promise to announce the appointment of a new finance director. The company needs a replacement for Stuart Greenwood, who resigned over the group's financial hiccup earlier this year.

An investigation into the accounts by the Independent on Sunday has raised questions about both the financial position of the company and how it is run, although Spring Ram has broken no laws or accounting guidelines in preparing the accounts.

Most controversially, none of Spring Ram's directors are retiring in rotation, giving shareholders the chance to re-elect them to the board. However, David Riley, the head of the bathrooms division, was offered for re-election last year and Mr Greenwood was offered the year before.

Almost all other quoted companies offer directors for re-election on a regular basis, and it is a recommendation of the Cadbury Report on Corporate Governance that a third of the board is offered for re-election each year.

Spring Ram said: 'There is no requirement in our articles of association - adopted in 1983 - for directors to retire by rotation. For the years 1990 and 1991, directors were offered for re-election in error.'

Spring Ram is expected to face questions about the level of profits from property and financial transactions, which made up nearly half last year's pounds 26.2m pre-tax profits.

The group will also face questions about the tone of the chairman's statement in the early part of the accounts.

It has emerged that Spring Ram may not go ahead with a development of a 560,000 sq ft factory at the Euroway Trading estate in Bradford, which is mentioned on page five of the accounts. Work is due to begin this summer, but there are no signs that it is about to start. Local farmers have complained about the decision to allow building on land that was, until recently, green belt.

Spring Ram would not say when work would go ahead.

(Photographs omitted)

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