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Lakehouse boardroom battle leaves investment advisers divided

A Lakehouse investor has urged his fellow shareholders to back proposals for a boardroom shake-up led by founder Steve Rawlings.

David Stredder said the company’s board members were “digging [their] heels in” over the attempted coup.

Mr Stredder is the chief executive of Sharesoc, a group that advises private investors.

Speaking on Share Radio, he said: “I’d probably urge any individual holders that are waiting, trying to see what on earth is happening… to vote for the resolutions that you see there and to actually say we’re going to have to see change because the current incumbents are just digging [their] heels in and are not going to change.”

Last month, Mr Rawlings and fellow shareholder Slater Investments requested the removal of non-executive directors Jill Ainscough, Jonathan Ford and Chris Geoghegan from the board, to be replaced by Mr Rawlings, Ric Piper and Robert Legget.

The move came in the wake of the shock departure of chief executive Sean Birrane, who was replaced by executive chairman Stuart Black.

Despite Mr Stredder’s comments, institutional investor advisory group Glass Lewis has recommended that shareholders vote against the proposals in next week’s general meeting.

In a report seen by Construction News, the advisory group said Mr Rawlings and Slater Investments had “failed to establish that fundamental operational or governance problems exist at the company”.

Glass Lewis added that those calling for the overhaul had not “articulated any specific alternative plan of action” to get the company back on track.

As a result, they urged shareholders to vote against the proposals.

Lakehouse has seen its share price plummet since listing on the stock exchange last year, while the group was forced to issue a profit warning in February after being hit hard by the government’s decision to cut social housing rents.

However, Glass Lewis argued that a single profit warning did not justify calling a special shareholder meeting.

Mr Rawlings and Slater Investments are the company’s two largest shareholders, collectively owning more than 20 per cent of the company.

Mr Stredder said: “Slaters and the founder have such a large vote with family members that they are not going to go away.”

He added that if they were defeated it would be “a tiny defeat” and one that would likely result in Mr Rawlings and Slater Investments changing a motion and calling another vote.

Mr Stredder said: “If [Mr Rawlings] came back he’d only be one of four execs, he couldn’t dominate anything… so I think it’s Stuart Black who doesn’t want Steve Rawlings to come back.”

Last month, Mr Black told Construction News: “We have made our position clear. We think these proposals are highly inappropriate and we would have to take a view based on what we find after the meeting… and we would do whatever is right for the business at that stage.”

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