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EGM Press Release
Posted: 13 August 2012
Commenting on easyJet shareholders’ narrow escape (by 3% ) of the motion to sack the chairman Mike Rake, Sir Stelios Haji-Ioannou, the budget airline’s founder and largest shareholder said:
“Contrary to how the spin doctors hired by Rake will portray today’s EGM result, I still feel that as the largest shareholder of easyJet, I still benefited from this process.
I drafted some very clear questions requiring very clear yes or no answers and all we got back is the usual wishy washy non-answers.
My objective is to hold these guys to account and not to replace them with myself or my own candidate. I am not even sure I trust their vote counting given their attitude towards binning proxies in our favour but anyway …we are where we are: The net benefit is that we got the chance to ask the tough questions and we the answers from people who have something to hide. In my mind the City has confirmed its reputation as the place where conflicts of interest and web of directorships are encouraged and protected for the benefit of a handful of insiders.
This vote does not change the simple fact that Mike Rake was asleep at the Barclays switch when the LIBOR scandal broke. As senior independent director, chairman of the audit committee or member of the risk management and corporate governance committees of Barclays he cannot shuffle away from his responsibilities. That he then considered himself suitable to take the top job at Barclays shows the monumental conceit and arrogance that underpins membership of the City Club. Fortunately for Barclays, their shareholders decided otherwise. They dodged the bullet. We haven’t. At least not yet. I would like to know what the easyJet board will do if Rake is in fact found responsible about the LIBOR scandal in the future? The investigation there has not even started.
“I hope this sad episode will highlight the need for tougher guidelines on the number of corporate directorships any one person can hold. The current practice of collecting them like Boy Scout badges – BT, Barclays, McGraw-Hill and easyJet - needs to end. Too many shareholders have been let down too often because their non-executive directors are just too busy to hold managements to account in an increasingly complex corporate landscape.
easyGroup has called for this EGM because we believe it is both in the best interests of the shareholders and the most suitable way to hold senior establishment figures like Mike Rake to account.
We have serious questions about his conduct at Barclays and our questions have not been answered so we will ask them again for the record, but first:
2. Did anyone from easyJet or its agents speak to Dominic O’Connell in the last 3 days?
3. What steps has the Deputy Chairman taken to find the individual who caused this leak?
4. If none, why is this culture of off-the-record briefings and anonymous support by shadowy shareholders perpetuated by this board?
5. We do not believe easyJet should be soliciting anonymous support from suppliers or their related pension funds. Rather the pension fund managers must be held to account for their acts or omissions in a public way. Despite our repeated requests under the Companies Act, Standard Life has refused to disclose the ultimate beneficial owners (UBO) of about 85% of their holdings in easyJet. Under the companies act this is against the law. What has the deputy Chairman done to force the disclosure of the UBO of the standard Life holdings in our company?
6. Do any of the 7 shareholders who supported Mike Rake as stated in your Stock Exchange RNS manage money for Airbus or its affiliates or pension funds? Yes or no?
7. Turning to the process of voting : In correspondence with easyGroup the board of easyJet has stated that they do not feel responsible to pass to us any proxy votes in our favour. Why?
8. Have any votes in our favour been binned?
9. How do we know they have not, if the Company Secretary’s office says it is not responsible, for the proper collection of all votes?
10. Given your attitude towards proxy votes in favour of this resolution, we do not trust the outcome of this vote and we would like to audit it ourselves tomorrow. Will we be given the chance? If not why not? Do you have anything to hide?
11. Turning to the substance of this meeting and the motion before us, you will therefore not be surprised that we have a number of questions, concerning the chairman’s record of adherence to the highest possible standards of corporate governance, competence and diligence. Therefore would the board and Mike Rake (if he is in the room – if not why not?) personally, to confirm the following:
a. When did Mike Rake first become aware of the LIBOR scandal at Barclays?
b. What did he do about it?
c. Did he actively seek the Barclays chairmanship as the press reported in June?
d. Why did he not get the job?
e. How many hours did Mike Rake devote to easyJet business (excluding the EGM) in July 2012?
f. How many hours did he devote to Barclays in the same month?
g. And to BT and McGraw Hill?
h. Did he take any holidays in that month?
i. Why did the circular calling for this meeting not even mention the Barclays scandal?
j. Assuming Mike Rake keeps the easyJet chair today, what assurances can he give to the shareholders about how many hours per month he can devote to easyJet in the future?
k. What does the board intend to do if Mike Rake is found responsible for failing to detect the Barclays LIBOR scandal at some stage in the future?
l. Will the rest of the board resign as well, if Mike Rake is found to be responsible?
m. As an example of Mike Rake’s inability to do justice to the job of chairing easyJet we would like to touch on the well-known Gulliford affair. Simon Gulliford was a contractor to easyJet hired by Carolyn McCall for a period of 9 months. At the end of his contract at easyJet two things happened - easyJet switched a £50m ad campaign to Chime. Chime then bought a sham company from Gulliford for nearly £5m . How many hours did Mike Rake spend investigating if the two events were connected?
n. Can the rest of the board confirm that they have fulfilled their duties under the Bribery Act 2010 when it comes to investigating the Gulliford affair?