Woolwich Building Society forced its chief executive Peter Robinson to resign over alleged financial irregularities because its board had a "duty" to do so, the chairman, Sir Brian Jenkins, said yesterday.
Sir Brian told more than 850 members at the society's annual meeting - twice the normal number who attend - that the decision had been reached with "great regret".
Although Mr Robinson's picture appeared in the society's annual report and accounts handed out to members, Woolwich yesterday used a procedural device to ensure his name was not put before members for re-election to the board.
"The decision we were faced with two weeks ago was not one any of us enjoyed having to face - and certainly not to have to take," Sir Brian said.
"We did our best to decide in good faith, and as swiftly as circumstances allowed, what we believed to be in the best interests of the society, its members, customers and staff."
He added: "The board decided ... that at the root of this issue was the loss of confidence and trust on the part of the board and the senior management in our former chief executive."
Despite several questions from the floor of the meeting, he refused to go into further details, beyond saying that the society had appointed lawyers and accountancy firm KPMG as external auditors to investigate the matter further.
Sir Brian's comments yesterday came as supporters and opponents of the society's flotation, planned for the spring of 1997, opposed each other in the meeting.
Michael Hardern, a founder of Members for Flotation, a pressure group hoping to force every building society to abandon mutual status, congratulated the Woolwich board for its decision. However, he called for the society to set up a charitable trust similar to that planned by Northern Rock, which aims to devote 5 per cent of its annual profits to deserving causes in the North-east.
Peter Budek, of the rival Woolwich Action Group against de-mutualisation, claimed the decision to float would mean "selling our current mortgage and investment rates to the Stock Exchange". More branch closures, staff redundancies and a worsening of services would follow the decision to de-mutualise, he said.
After the meeting, Mr Budek said: "If we vote in favour of this, we will be handing over a portion of democracy that was handed to us on trust. We have no more moral right to sell off the Woolwich than the Queen has to sell Buckingham Palace."
Many members turned on a handful of supporters of so-called "carpetbaggers", the 30,000 investors who rushed to open accounts days before the float was announced in January, in the hope of winning free shares.
They were shut out retrospectively by the society. One member claimed that paying them off would only cost about pounds 5 each.Reuse content