Trafalgar shareholders vent anger

A DEEPLY unhappy band of shareholders in Trafalgar House, the engineering and construction group, yesterday approved a plan to recapitalise the company with a pounds 205m rights issue.

However, Alan Clements, the chairman, was repeatedly forced to defend his board, the accountants Touche Ross, and the merchant bank Kleinwort Benson from shareholders baying for blood.

John Ansdell, the finance director, was singled out for particular criticism, prompting the chairman to state his 'full confidence' in him.

The position of Touche Ross is 'under review', according to the company. Mr Clements said no changes in advisers or board members were planned.

Private shareholders are also suspicious about the motives of Hongkong Land, the company that has built a 20 per cent stake in Trafalgar over the past six months. It has two representatives on the main Trafalgar board.

One investor, Ernest Middleton from Nuneaton, who in six years has seen his shareholding fall by 75 per cent, said Hongkong Land had no interest in a recovery of Trafalgar's share price 'because it wants to buy the company on the cheap'.

About 200 shareholders jammed into a small room at the Chartered Insurance Institute to attend the special meeting called to approve the rights issue.

Trafalgar directors had to endure further embarrassment because the room booked for the special meeting was too small to accommodate the shareholders who turned up.

Mr Middleton said: 'It is not difficult to see why the company is in such trouble when it cannot even organise an egm properly.'

Another shareholder asked for reassurance that Trafalgar had 'no more skeletons in the cupboard, that there were no substantial write-offs waiting to be revealed, and that there would be no further rights issues for five years'. Mr Clements gave no concrete assurances.

Despite the hostile atmosphere only a handful of shareholders voted against the board yesterday, and detractors were outnumbered both at the meeting and among proxy votes cast by institutional shareholders.

Trafalgar's engineering division won a dollars 60m contract to build an acetic acid factory in China.

(Photograph omitted)