LONDON (Reuters) - British fund manager Royal London Asset Management (RLAM) plans to launch a shareholder rebellion against Metro Bank (MTRO.L) over payments made to a company owned by the wife of Chairman Vernon Hill.
RLAM, which has a 0.44 percent stake in the bank, on Friday said it would vote against the reappointment of Hill and audit committee chairman Stuart Bernau at Metro’s annual shareholder meeting on April 24.
Metro Bank’s annual report and accounts stretching back to 2010 show payments to InterArch, an architecture firm owned by Shirley Hill, totalling more than 21 million pounds ($30 million).
“We question whether Metro Bank’s audit committee has been sufficiently rigorous in its scrutiny of the payments made to InterArch,” Ashley Hamilton Claxton, head of responsible investment at RLAM, said in a statement.
“Our concerns about these transactions is heightened by the history of related party transactions between the chairman and members of his family.”
Hill was ousted from Commerce Bancorp, later acquired by Toronto-Dominion Bank (TD.TO), in 2007 after regulators opened investigations into business dealings with InterArch and other related parties.
United States-based Hill could not immediately be reached for comment on Friday.
Metro Bank said in a statement that it took measures to ensure the terms of its arrangement with InterArch were favourable for the bank.
“The audit committee has strong review and benchmarking processes in place, conducted by authoritative independent third parties,” it said in a statement.
RLAM also plans to vote against the bank’s advisory remuneration report and the chairman of its remuneration committee, Howard Flight, describing its attitude towards pay as “opaque at best”.
Metro Bank said it believes the performance measures used to calculate executive pay awards are transparent and clearly articulated.
($1 = 0.7005 pounds)
Reporting by Emma Rumney; Editing by David Goodman