Bank of England governor Mark Carney says he can’t see Xavier Rolet continuing as London Stock Exchange boss
Bank of England governor Mark Carney today said he thinks it unlikely that Xavier Rolet will continue as chief executive of the London Stock Exchange (LSE) Group, in an implicit backing of the LSE board in its public battle against an activist investor.
Hedge fund manager Sir Chris Hohn last week demanded the Bank step in to remove LSE chairman Donald Brydon, alleging he is forcing Rolet out without due cause.
Speaking in London after unveiling the results of the Bank’s latest stress tests of major lenders, Carney said he was “mystified by the debate” but called for “clarity… as soon as possible”.
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He said: “I can’t envision a circumstance where the CEO [chief executive] stays on beyond the agreed period.”
The LSE is regulated by the Bank as the owner of LCH, which is a dominant global player in the systemically important derivatives clearing industry.
The Bank had been informed of the LSE’s plans to appoint a new head before Rolet publicly announced his retirement in October, and has been kept updated on progress, Carney said.
The dispute between Hohn’s fund, The Children’s Investment (TCI) fund, flared up after the LSE board failed to give a satisfactory answer on the reasons for Rolet leaving, stunning the City after the initial success of the LSE’s succession plan.
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The fund manager argues Rolet, who has signed an agreement with the board not to discuss the nature of his departure, has driven value creation at the LSE, and that removing him from his position would be detrimental to shareholder value.
Carney today hailed Rolet’s “extraordinary contribution” to the LSE over the course of nine years. Rolet is widely acknowledged to have driven the LSE from a declining, if venerable, City stalwart to a major player on the international scene through acquisitions.
The Bank governor’s comments will be received as a welcome boost for the LSE board, ahead of a crunch meeting to decide the dispute. Hohn has requested a shareholder meeting to vote on removing Brydon and extending Rolet’s contract. The LSE has until Friday to announce the date of the meeting, setting up a dramatic showdown before the new year.
A spokesperson for TCI declined to comment. The London Stock Exchange declined to comment.
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