Family board games... Wendel reshuffles

The latest chapter concerning the bickering and family infighting at Wendel made the headlines when Jean-Bernard Lafonta stepped down from his role as CEO. The situation has been coming to a head for the last few years between the 900-odd family shareholders of the 300-year-old investment house and the team managing it.

Although the departure of Lafonta is sure to ease some of the issues within the conservatively minded investment group, Ernest-Antoine Seilliere, the chairman of the board's position, is still a subject of controversy since he has vowed to stay put and be re-elected at the June general meeting. The pressure had heightened recently as 45 family members sent a letter to Francois de Wendel, chairman of the family holding company Societe Lorrasine de Particiapations Siderurgiques (SLPS), which wields 35.9% of the equity and 46.3% of the vote at Wendel and also controls the majority of board seats, to hold a vote on replacing Wendel's directors.

Troubles had kicked off when Seilliere (at the time also chairman of SLPS) and the board voted to sell 4.5% of the company to Lafonta and other executives. In riposte, a group of family shareholders led by Seilliere's cousin Sophie Boegner managed to oust him as chairman of SLPS. A court case between the two factions is still ongoing regarding the sale of the shares to the management. The family disagreements were heightened as Wendel took a EUR6bn stake in building materials company Saint-Gobain. The unpopular investment lost the management even more credibility after agreeing to participate in Saint-Gobain's EUR1.5bn rights issue after the firm, which had seen share price dropped by as much as 60%, had already caused Wendel's debts to balloon.

The arrival of Frederic Lemoine as new CEO should play an important part in stabilising the boat. The non-executive chairman of nuclear group Areva should step into his new role on April 15th. Cohesion and unity must return to Wendel's helm in order to steer it through the current difficulties. The changes, which have led to a 3.8% jump in Wendel's share price, are hopefully a step in the right direction. Meanwhile, Wendel reported that net profits have dropped from EUR879m to EUR158m (see people moves, below).

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