Five Rock chiefs to go as sale bidders line up
Nov 17 2007 by Adrian Pearson, The Journal
NORTHERN Rock chairman Adam Applegarth has announced he is stepping down from the bank as bidders prepare for a takeover battle.
The chief executive will leave in January after overseeing the next phase in the bank’s strategic review – a process which could net him a considerable compensation package.
Four of the bank’s much-criticised non-executive directors have also stepped down with immediate effect.
Last night the bank was remaining quiet over any payments to the departing staff, including former NatWest chief Sir Derek Wanless, Nichola Pease, Adam Fenwick and Rosemary Radcliffe.
Mr Applegarth and Sir Derek were strongly criticised by the Treasury Select Committee last month.
Sir Derek was accused of failing in his duty by committee chairman John McFall, who said he “should have alerted the Northern Rock board to the dangers of its market strategy”.
Yesterday Newcastle North MP Doug Henderson said the bank had now been placed in a difficult position.
He said: “We need stability in the bank, especially for the workforce, and if anything happens to put the sale at risk, you will have a lot of trouble getting someone to lead the bank.
“They have not yet ruled out trying to save the bank without sale, and either that or selling the bank will both be a lot more difficult without a strong chief executive.”
In a statement yesterday evening, the Rock’s new chairman Bryan Sanderson said: “Adam’s participation in the next phase of the strategic review is important, not least due to his extensive knowledge of the business and his ability to lead the process during this difficult period.”
The bank also announced that John Devaney and Simon Laffin would join its board as non-executive directors once they have been approved by the Financial Services Authority.
The announcement came as the Friday evening deadline approached for the bank’s sale after the publication of a business memorandum which was sent to up to 50 organisations, including companies in continental Europe and Asia.
While national newspapers were reporting eight firm bids, sources at the bank said the figure might be just seven.
Richard Branson’s Virgin Money consortium has promised to pay off a significant proportion of the bank’s debt “immediately” if his bid is successful.
While Virgin is the only group to confirm a bid, US private equity firms JC Flowers and Cerberus have said they are interested in buying the bank.
Regional office head of Barclays Wealth Andrew Miller said the departure would come as no surprise to many. He said: “There is of course no takeover at the moment, but many interested parties.
“And if you look at the bids, none of them have made any secret about bringing in their own management team, and that is to be expected.
“Whatever form of business emerges from the Northern Rock, it was never likely to include the same chief executive.
“I think most people knew this was inevitable, but I imagine not many could have predicted the date.”
Michael Queen and Sir Ian Gibson, who chairs The Journal’s parent company Trinity Mirror, will continue to serve as non-executive directors.
David Baker, Keith Currie and Andy Kuipers are standing down as board directors, but remain officers of the company, while Dave Jones continues as finance director.
