Belfast Telegraph

Stock Spirits chairman rejects Western Gate's proposed appointments

The chairman of London-listed vodka maker Stock Spirits has urged shareholders to reject a set of proposals put forward by an activist investor.

In a wide-ranging letter, David Maloney hit back at Western Gate Private Investments, which is demanding "fresh perspectives" that include the appointment of two non-executive directors.

He accused Western Gate, the company's biggest shareholder, of "seeking undue influence at the expense of other shareholders".

He said: "We believe that Western Gate and Luis Amaral, by proposing the appointment of two hand-picked directors to the board, are seeking to gain undue influence, thereby limiting the company's strategic and operational flexibility. This goes against best corporate governance."

Western Gate is controlled by Portuguese businessman Mr Amaral, the owner of Eurocash, Poland's largest food wholesaler and also a customer of Stock Spirits.

"The board feels strongly that Mr Amaral's links with Eurocash mean that he is not seeking changes that would be in the best interest of all shareholders, which your board is focused on," Mr Maloney added.

Earlier this month, Mr Amaral said "f inancial performance has been poor" and that management of the company "is clearly not working".

On Monday, Chris Heath stepped down as chief executive of Stock Spirits, just weeks after Western Gate called for him to be ousted.

Mr Maloney said: "Chris Heath has taken early retirement, with Mirek Stachowicz taking on the role of interim CEO. This renders the resolution calling for the Chris's removal redundant."

Mr Maloney added: "Other shareholders see there is a conflict of interest and are sceptical about bringing on the non-execs. The whole affair is very distracting for the management team."

However, Mr Amaral hit back, saying: "They say that I have an 'overriding' conflict arising from my position at Eurocash, but chose to ignore perhaps that stock makes up just 3% of Eurocash revenues and a negligible contribution to profit.

"I can only conclude that the reason why they are rejecting the proposed non-executive director candidates is because they didn't come up with the names themselves."