Financial News

  • 25 March 2013, 1:47

Investors To Deliver Peace Time Ultimatum

Two leading shareholders in Standard Chartered, the emerging markets bank, are poised to issue an ultimatum about the future of Sir John Peace, its chairman, following an embarrassing climbdown over US sanctions-busting offences.

Sky News has spoken to major investors in the bank - which has continued to trade strongly through recent difficulties with US regulators - who said yesterday's humiliating retraction of comments made by Sir John earlier this month meant that changes to his portfolio of interests had now become "essential".

Standard Chartered yesterday issued a statement in which it apologised for Sir John's suggestion that its breach of US sanctions rules which meant it processed prohibited trades with Iran were "clerical errors" and had not been "wilful".

Sir John is the only person to chair three companies in Britain's blue-chip share index, sitting at the helm of both Burberry, the fashion group, and Experian, the credit checking organisation.

His comments at a press conference earlier this month angered the US authorities to such a degree that Sir John was summoned to a meeting in Washington yesterday along with Peter Sands, the bank's chief executive, and Richard Meddings, its finance director. It followed a $667m settlement between Standard Chartered and the regulators late last year.

The remarks appear to have crystallised a view among some Standard Chartered shareholders that juggling three demanding roles has left Sir John with too little time to devote to the chairmanship of one of the world's largest banks.

"We would prefer the conversation to be held in private before we go public, but there is little doubt that the time has come for him to either focus on the bank role or keep the others and leave Standard Chartered," one major investor said.

"It is essential that he [Sir John] gets a grip on things, and this week's events compound our sense that he cannot do that when he is chairing three FTSE companies," said another.

The two investors said they would press to hold discussions with Standard Chartered shortly about the issue.

The growing hostility towards Sir John from a number of influential shareholders raises the prospect of a revolt against him at Standard Chartered's annual meeting, although a person close to the bank said that soundings from shareholders in the last 24 hours had been "positive" about his chairmanship.

"It [Sir John's workload] has never been an issue that has been raised with us by our major shareholders either in the past or in the last 24 hours," a Standard Chartered spokesman said.

The disgruntled investors are City institutions and do not include Temasek Holdings, the Singaporean state investment company that is Standard Chartered's largest shareholder with an 18% stake.

An ally of Sir John's said that the performance of each of the companies that he chairs had been strong throughout his time on those boards.