The sale of Dawson International's world-class spinning arm Todd & Duncan in Kinross has been agreed with Zhongyin of China, subject to agreement on the lease of the historic mill site which was sold to a London property company two years ago.
Dawson yesterday announced the near-completion of the deal with its Chinese raw-cashmere supplier, and said the agreement would safeguard the supply of yarn to Barrie Knitwear in Hawick, Dawson's other surviving heritage business and one of the mill's biggest customers.
The shrunken Scottish textiles group is familiar with boardroom coups and stormy annual meetings, and both were staged yesterday as chairman Mike Hartley was, as expected, removed by 28.8% shareholder Leeds Group, controlled by Swedish investor Peter Gyllenhammar.
In a spirited two-and-a-half-hour meeting at Kinross, small shareholders including 92-year-old former chairman Sir Alan Smith, former finance director John Embrey and clothing entrepreneur Robin Veitch aimed their fire mainly at Gyllenhammar, who took the floor to answer questions. But the claim of the assured and steely Swede not to be engineering a "creeping takeover" was dented when he unexpectedly called for a poll on the re-election of non-executive Stephen Russell, effectively removing the senior and only independent non-executive alongside his own two nominees.
Hartley was called on to defend last year's executive bonuses, which doubled the salaries of chief executive Andy Bartmess and finance director David Cooper, with Gyllenhammar claiming that paying Bartmess in dollars meant his £360,000 had been closer to £500,000.
Veitch added: "We showed a profit of £184,000 yet £368,000 has been taken by three employees (in bonuses). It strikes me this is the Goodwin era going mad in Kinross."
Hartley said no bonuses had been paid in the previous two years, and Dawson had unusually published all the targets that executives would have to meet this year to gain the maximum - which would be "unlikely".
Asked what he wanted to do with the company, Gyllenhammar said it was "not Leeds that will do things in Dawson, it is the Dawson board and management team", and claimed there had been "confrontations" with shareholders and "discussions that have not been particularly constructive".
His two-track strategy was to grow the company and to tackle the group's legacy pension scheme, which was a "poison pill and a wet blanket", Gyllenhammar said. He cited his own record in tidying up a textile-company pension scheme in Yorkshire, into which he had injected £1.5m of his personal wealth.
But Hartley was barely contradicted by Leeds Group's nominee directors when he said no proposals had yet been made in the board to improve pension management. He added that a board meeting the previous day had agreed on the growth strategy, which was the bolt-on acquisition of similar high-return businesses to its own.
Sir Alan Smith said: "I haven't heard anything that tells me I should vote for these three gentlemen, who know absolutely nothing about cashmere and would not know a cashmere goat if they met one. Tell us what the hell you want to do and how you are going to do it."
Laurie Todd, representing 8% shareholder Guinness Peat, said: "I listen to Mr Gyllenhammar's words about it being important that board represents the interests of all shareholders, and I can't reconcile that with the lack of support for the existing senior independent director."
Gyllenhammar said: "You should interpret the fact that we haven't made an offer as showing we have no interest in taking control of Dawson. Our interest is entirely aligned with other shareholders."
Hartley said the performance of the group had been turned round in the past five years, and that the board had not blocked any strategic proposal but had identified "some really good candidates for independent chairman", which Leeds had blocked.
Todd commented afterwards: "I don't understand what the strategy is because we have not heard what it is."
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