Stock Exchange Chiefs Defy Fury of Shareholders; Raiders Are Lining Up to Plunder the City's Best Claret
Byline: ALEX BRUMMER
THE TOP men at the London Stock Exchange faced a torrent of criticism at the annual meeting yesterday.
Shareholders' anger centred on the rollercoaster ride the Stock Exchange has been through over the past few months, which saw it agree a marriage with the Deutsche Borse in May, only to pull out two days ago to defend itself against a [pounds sterling]808million hostile bid from Sweden's OM Gruppen.
Widespread dissatisfaction was reflected in a show-of-hands vote against re-electing chief executive Gavin Casey - although he kept his post after narrowly winning a second vote, taken on a formal poll system, with just 56 per cent approval.
Chairman Don Cruickshank, who has held his post only since April, also saw a number of hands raised against him, but won 66.5 per cent backing in the second vote.
He insisted that the board had been right to try for the opportunity presented by German merger, and 'equally right' to withdraw from it.
But shareholders were not impressed.
One said: 'I have seen this institution lurch from side to side. There seems to be a lack of direction.' Another asked: 'Can we expect resignations in due course?' Below, the Daily Mail examines the background to the anger and predicts more drama ahead.
THE LONDON STOCK Exchange, perched grandly in its tower overlooking the Bank of England and boasting a fine wine cellar, is facing the greatest test in its 240-year history.
Like two other pillars of the old City, Lloyds of London and the Bank itself, it has been forced onto the back foot by a changing global landscape, new technology and a series of management blunders.
Faced with the need to meet the technology challenge, the London exchange, urged on by the American and Continental investment banks which now dominate the City, decided to merge with the Deutsche Borse, its smaller German rival.
Out would go the old clubby London exchange with its clunky trading system.
In its place would be a shining new market which would account for 50 per cent of the volumes of stocks and shares traded across Europe as well as 80 per cent of the trades in new fangled derivative instruments.
The goal was to bring together London's bigger market and Anglo-Saxon enterprise with the superior German trading system and expertise trading system and expertise in dealings in highly-fashionable technology and internet shares.
But the deal has exploded in the exchange's face. Its new chairman, the former telecoms watchdog Don Cruickshank, brought in to drive the merger forward, has been forced into a humiliating retreat by opposition from within the ranks of the LSE's own shareholders.
EVEN MORE anger has been directed at the pinstriped chief executive Gavin Casey, whose stewardship of the exchange has been marked by mechanical glitches and a failure to recognise that London's position was threatened by new lower-cost markets.
The arrogance of Cruickshank and Casey, who thought they could force members down a path they were unwilling to tread, led to one of the most combustible annual meetings.
Members delivered a sharp rebuff to Casey by refusing on a show of hands to re-elect him.
The decision was narrowly reversed after a full poll, but he must now be regarded as damaged goods. …