Smaller Companies: Directors face wave of revolts from floor

SHAREHOLDERS are revolting - particularly those in smaller companies, where belligerence is in the air. Directors are encountering heavy flak from shareholders short on patience and out for blood.

There is no guarantee that a company's annual meeting will be the passive affair that it used to be. The frequency of hostile extraordinary meetings is increasing, with shareholders banding together in attempts to oust incumbent directors.

One of the most recent and most publicised bust-ups involved Simpsons of Cornhill, owner of two of the most famous restaurants in the Square Mile, which became embroiled in a bunfight with shareholders complaining about cost overruns and escalating directors' fees.

Shareholders failed in their attempt to sack the board, headed by Roy Ackerman, formerly with Kennedy Brookes, and Paul Reece, who joined from Midsummer Leisure. The discontent is still prevalent below the surface, however, and there is every chance that Roger Klapp, the rebels' leader, will mount a fresh challenge.

Hoskins Brewery is also likely to face a barrage of abuse soon. Richard Cattermole, a shareholder, wants to join the board and simultaneously remove Barrie Hoar as chairman.

While that episode takes shape, Harmony Leisure Group is preparing its defences against an attack from a third of the shareholders, who want to replace the entire board.

The dissidents are fronted by Andrew Martyr, a former hotel executive, and Simon Lynch, formerly with Grand Metropolitan. Further support comes from Ronald Laden, a former chairman of Quaker Oats (Europe). They have more than enough requisitions to convene an egm. They recently bought 500,000 shares themselves, equal to 2 per cent.

Outsiders need look no further for the reasons behind the fight than the company's appalling share price and trading record over the last three years.

The last time the shares made a worthwhile advance was in late 1988 to early 1989. Apart from the occasional blip, it has been a downhill ride. The price this year has dwindled from 15p to the 5p par value.

The pubs, hotels and restaurants group last made taxable profits in 1987/8. The red ink has deepened in colour in the last four years from pounds 128,000 to pounds 818,000 to pounds 2.17m and finally to pounds 3.68m in the 12 months to March 1992.

This has happened under the collective stewardship of Stanley Lever, managing director, John Lever, hotels director, Pamela Lever, projects director, and Frank Amhurst, a non-executive director. The last two annual reports, for 1990 and 1991, are conspicuous for the absence of a finance director - a post last mentioned in the 1989 publication.

The Lever family speaks for 24 per cent. Perhaps it is time for them to listen to the calls for resignations.