Non-execs walk out at Reed Health

By THIS IS MONEY
Updated:

 

NON-EXECUTIVE directors at crisis-ridden Reed Health Group resigned in protest today amid allegations of management interference by founder and major shareholder Alec Reed.

Health industry veterans Alan Dexter and Daphne Statham quit their £30,000 a year roles and spoke of a climate of 'misunderstanding and mistrust'. They said in their letter of resignation: 'Our independence has been compromised.'

Their departure comes after last autumn's bizarre coup which saw the multimillionaire, Labour-supporting Alec Reed effectively sack the group's chief executive and finance director by using his 51% of the shares to block their re-election at the annual meeting.

The intervention, believed to be unprecedented in recent corporate governance history, horrified institutional investors but Alec Reed has neither apologised nor given any explanation.

Investors led by near-20% shareholder Schroder Investment Management have been calling for the resignation of Reed Health's chairman, Lord Tom Sawyer. He is a friend of Alec Reed, a close ally of the Prime Minister and a former union baron and general secretary of the Labour Party.

Sources at the group said despite Sawyer's 'complete loss of credibility' his decision to brazen out the affair left little room for manoeuvre for the two independent non-executives.

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