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Shareholders rail at Norwich chairman

Andrew Garfield,Financial Editor
Saturday 01 April 2000 00:00 BST
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The board of Norwich Union yesterday experienced shareholder democracy in the raw after rebel shareholders forced a no-confidence vote at a tempestuous meeting called to approve its £12bn merger with rival CGU.

The motion was defeated overwhelmingly thanks to 400,000 proxy votes cast before the meeting, and the merger itself was approved by a more than 91 per cent of votes. However, George Paul, the chairman, was clearly rattled after a barrage of interventions in which his authority and the board's motives were repeatedly called into question.

The majority of protests came from policyholders angered by the decision of the group to cut bonuses on policies by as much as 9 per cent last year. There was also resentment at the terms of the deal: NU shareholders will receive a 41.5 per cent holding in the combined group, although the company will account for more than 50 per cent of profits.

In scenes bordering on the farcical, Mr Paul appeared at one point to have completely lost control of proceedings after his attempts to have the no confidence motion ruled out of order where overturned on the advice of Norwich Union's lawyers Slaughter & May.

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