The Covéa-SCOR spat has been grabbing headlines for months, and now the issue has taken another controversial turn.
That’s because French activist fund CIAM is reportedly going to ask SCOR’s CEO Dennis Kessler to give up his chairmanship after he slammed the brakes on a potential takeover earlier this year. CIAM currently holds just under 1% in the reinsurer and has issued a statement outlining that it will ask the board to oust Kessler from the chairmanship, although it wants him to hang on to the CEO position of a company he has run since 2002. This follows on from its strongly worded letter in February.
Read more: Shareholder slams SCOR’s move against Covéa
According to a Reuters report, the moves comes after Kessler blocked the 8.5 billion euro takeover attempt from Covéa that could have brought in a 20% premium on SCOR’s share price. Covéa had been seeking full control of the reinsurer of which it holds just over 8% currently. Since Covéa’s plans were dropped, shares in SCOR have slipped by more than 10%.
Read more: SCOR-Covéa spat heads to criminal court
Now, CIAM is openly questioning Kessler’s handling of the move.
“The hostile reaction towards its major shareholder did not seem appropriate,” it said.
It went on to criticise Kessler as being “ubiquitous and omnipresent” in the company’s governance. It also suggested he makes it hard for the board to oversee him via a constant reshuffling of seats.
Further criticism was also targeted as his alleged lack of a succession plan – despite the fact that Kessler is 67. “His constant referencing of SCOR as his, even though [he] is not the founder nor the owner,” was also noted.
“The dysfunctional governance of SCOR is obvious and triggers serious issues in the company’s management that increase risks for shareholders,” the fund outlined in a document released among SCOR shareholders.
