More questions are being asked about the demutualisation of LV=, with Gareth Thomas MP writing to the chair of the business.
Mr Thomas, who chairs the All-Party Group for Mutuals, has 12 key questions for Alan Cook. This comes after the APPG published a damning report on the proposed sale of Liverpool Victoria to controversial US private equity giant Bain Capital.
The MP says Mr Cook “has emerged as the one constant in the leadership of LV= through each key stage from the conversion to a company limited by guarantee on the 22 May 2019, the departure of one chief executive and the appointment of a new CEO in December 2019, the launch of a secret Strategic Review by the Board of LV= in early 2020, the decision not to hold even a virtual open AGM through to the decision to demutualise in September 2020, and the exclusive negotiations with Bain Capital, beginning in October last year.”
He adds that Mr Cook was “key to efforts to firstly reassure owner/customers that there was no plan to demutualise and then in a striking change of view was particularly clear during the recent meeting with members that one of the benefits of converting to a company limited by guarantee is that it was easier sell the business and demutualise”.
The letter asks Mr Cook:
- When did you come to the realisation that demutualisation was an option for LV=?
- What were the instructions given to Fenchurch Advisory [financial advisor to LV=]?
- Whether you will publish your full terms of engagement with Fenchurch Advisory?
- What would your remuneration be as chairman of the new Bain owned business including pay, share options and other benefits?
- Given Bain’s previous practice of replacing much of the senior leadership of the businesses that they take over and given the evidence received by the inquiry that Bain do not intend to retain most of the current directors of the board, have you entered into a written agreement to secure your continued involvement in the business?
- When in 2019 did you instruct advisors to find a new CEO?
- When did you first meet Mark Hartigan [LV= CEO from 2019]?
- Did Mark Hartigan know at the time of his appointment that demutualisation was an option?
- Why did Richard Rowney [previous CEO of LV=) leave?
- Did Richard Rowney leave voluntarily?
- Why was Richard Rowney paid a year’s salary on his departure?
- Why did you not think it prudent to hold an Annual General Meeting open to members (even virtually) in 2020?
Mr Thomas said he hoped the LV= chairman will provide a full response to his questions ahead of an upcoming briefing meeting for members of LV= interested in the All-party group’s report into the planned demutualisation of LV=.
The event will take place on May 4 at 2pm and is open to any LV= member and will be led by Mr Thomas with Peter Hunt, managing partner of Mutuo, which provides the secretariat to the APPG.
Concerns surrounding the demutualisation and sale of LV were further raised at Wednesday’s Treasury Select Committee when Angela Eagle MP raised with treasury minister John Glen how the potential takeover of LV by Bain Capital would likely be used as a “bridgehead” for other hostile bids to takeover other UK mutuals.
Co-op News contacted LV= for comment on Mr Thomas’s letter. A spokesperson said: “We received the letter from Gareth Thomas MP yesterday and will be responding in due course.”