LV bosses must step down to safeguard firm’s future in wake of private equity debacle, demand MPs
Tainted: LV’s chief executive Mark Hartigan (pictured) and chairman Alan Cook are still in their roles
LV members and MPs have called for a shake-up of the mutual insurer’s board to ensure it is set fair for the future.
The life insurer’s chief executive Mark Hartigan and chairman Alan Cook are still in their roles despite failing to push through a sale to private equity shark Bain Capital last week. Other members of the board, who backed Cook and Hartigan, have also remained in place.
These directors include Alison Hutchinson, who is also on the board of the mutual Yorkshire Building Society, former Aviva UK life insurance head David Barral, ex-Standard Life top brass Colin Ledlie and Luke Savage, actuary Seamus Creedon and former Phoenix Group executive Susan McInnes. But MPs, campaigners and LV members claim the board no longer has members’ support, and should no longer lead the firm as it plans for the future.
MPs are worried about Hutchinson pushing through a sell-off of LV while also playing a key role at Yorkshire Building Society.
Labour MP Gareth Thomas wrote to Hutchinson in July asking for an explanation and querying whether she would countenance a sell-off of the Yorkshire.
Thomas, who leads the all-party parliamentary group on mutuals, said yesterday: ‘With almost 90pc of the members of LV not backing their dodgy deal and not one genuinely independent expert backing the deal either, the board are quite clearly not fit for purpose and shouldn’t be anywhere near negotiations about what might come next.
‘After what was a highly opaque and ultimately botched attempt to sell off to one of the world’s most controversial private equity giants in Bain Capital, Mr Cook and Mr Hartigan should do the decent thing and go immediately and the Financial Conduct Authority should oversee an orderly replacement of the current board.’
Tory MP Kevin Hollinrake said: ‘LV needs new management. Alan Cook should be banned from being a director – and when he was called in front of Parliament during inquiries into the Bain deal, he gave poor answers to questions and showed a lack of understanding of the fundamentals of the business.’
LV said on Friday that Hartigan had the board’s ‘absolute and full support’.
Cook and Hartigan said they put the firm up for sale because it desperately needed cash to expand and modernise.
They plumped for an offer from Bain, which would have stripped LV of its mutual status, despite having a similar offer from fellow mutual Royal London.
Eventually the deal was dismissed, and LV has gone back to the drawing board. Royal London is urging it to engage in talks.