Stock shareholder slams board shake-up

An activist investor has hit out at Stock Spirits for “ignoring” shareholder wishes after the firm failed to appoint two new independent non-executive directors to any one of its four board committees.

Western Gate Investments has hit out at Stock Spirits

The claims were made by Western Gate Investments – the largest stakeholder in the Central and Eastern European producer – following a board reshuffle, announced earlier this week.

Western Gate triumphed in a battle against Stock Spirits in May, appointing Heineken Group’s Alberto Da Ponte and PepsiCo’s Randy Pankevicz to the board of directors as non-independent non-executive directors.

The firm claims Stock Spirits has “ignored the wishes” of shareholders by failing to appoint Da Ponte and Pankevicz to any of the company’s four board committees, governing audit, remuneration, director nominations and disclosure.

Western Gate, which owns a 9.7% stake in Stock Spirits, also criticised the appointment of three additional non-executive directors: Tomasz Blawat, Diego Bevilacqua and Mike Butterworth.

A spokesperson for Western Gate Investments told The Spirits Business: “Stock’s board now has nine directors – just two short of Diageo, a company that is some 180 times larger.

“[The] announcement also confirms that the two new independent non-executive directors appointed in May 2016 have not been allowed to join any of the four board committees.

“This ignores the wishes of shareholders that those new directors play a full role in helping to turn the company’s fortunes around.”

Western Gate also reiterated its concerns with regards to Stock Spirits’ performance, which include declining market share in Poland, an “under-performing” share price, and “spiralling” corporate costs.

The spokesperson added: “[The] statement from the company also talks about its ‘underlying philosophy’. In my view the board should not be spending its time deliberating ‘underlying philosophy’, but instead be focused on selling more vodka in Poland and cutting unnecessary head office costs.

“It has been approximately two years since the first of the company’s disastrous profit warnings. The share price today remains approximately half what it was before that first warning.

“We look forward to the forthcoming November 2016 trading statement to see whether the board has spent that two years wisely in turning its business around.”