Activist investor refuses to back down on calls for LSE chairman's resignation

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Activist investor The Children's Investment Fund Management (TCI) will not give up its fight to remove London Stock Exchange (LSE) chairman Donald Brydon, despite concessions over his re-election in 2019.

Christopher Hohn, investment manager of TCI, said in a letter that a resolution to remove Mr Brydon "should proceed to a general meeting" no later than December 28.

"There is no change to our position on this," he said.

It extends a spat between the stock exchange group and TCI, which has accused Mr Brydon of pushing out chief executive Xavier Rolet, who stood down on Wednesday.

The LSE also confirmed this week that Mr Brydon will not not stand for re-election in 2019, stopping short of meeting the TCI's demands for his immediate removal.

However, given Mr Rolet's early departure, Mr Hohn said TCI was withdrawing a special resolution that called for the LSE to terminate its search for a new chief executive and leave Mr Rolet in the position until 2021.

The former chief executive will walk away with a £13 million golden goodbye, as the LSE continues its public battle with TCI - which owns a stake of over 5%.

The controversy has even drawn comment from the Bank of England, with Governor Mark Carney earlier this week saying he was "mystified" by the tussle.

Mr Rolet hit out at "unwelcome publicity" as he announced his departure on Wednesday, saying that it "has not been helpful to the company".

He said: "At the request of the board, I have agreed to step down as CEO with immediate effect."

Brexit
Xavier Rolet stepped down as LSE CEO on Wednesday (PA)

Mr Rolet will be placed on gardening leave for 12 months, during which time he will be paid his £800,000 a year salary in full with a host of potential bonuses -  together worth up to £13 million.

The LSE said earlier this week that it had asked TCI to withdraw its requests in light of the announced departure of its CEO and the cap on Mr Brydon's term.

However, the exchange group said that it would still hold a shareholder meeting if TCI does not withdraw its request in full.

Mr Rolet's departure comes after more than eight years in the top job, during which time the LSE has seen its stock market value soar from £800 million to nearly £14 billion.

His tenure has seen LSE seal a string of acquisitions, although it was marred by the recent failed attempt at a £21 billion merger with German rival Deutsche Borse after it was blocked by the European Commission in March.

This was the third attempt at a tie-up between the two companies after setbacks in 2000 and 2005.