Custos Group, the largest shareholder in Johnston Press — the debt-laden owner of The Scotsman, the i newspaper, the Yorkshire Post and about 200 local news outlets — said on Friday it increased its shareholding from 20% to more than 25% “to be more active and ensure some of the more insane board or adviser actions can be blocked.”
Johnston Press said on October 11 it decided to “seek offers for the company.”
The share price of Johnston Press has fallen drastically in recent years to around 2.2p today, meaning the firm has a current stock market value of only £2.4 million, according to Bloomberg data.
In a statement, Custos Group CEO Christen Ager-Hanssen said: “The long and proud 250 year history ofJohnston Press has now been replaced by a more recent and tragic history of rampant fee-sucking by its negligent board and incompetent advisers.
“And with the board’s new strategy to sell its crown-jewels, the fee-sucking will simply increase.
“Sadly, JP has become a textbook case of shareholder-value destruction.
“Since JP’s bond issue in 2014, the destruction of shareholder value amounts to more than 99%. Against this disastrous performance, the board led by Camilla Rhodes, have seen fit to pay themselves over 7 million pounds.
“That is an outrageous amount that equates to approximately 3 times today’s market cap. Moreover, the poison pill that was established in the bond agreement cynically deprived shareholders of their fundamental right and power to hold the board properly to account and to change the board as they see fit.
“This is nothing short of corporate theft of power from all shareholders ensuring that only the directors can decide who replaces them.
“Such corporate theft is a grotesque display of greed, self interest and unaccountability by the Board of JP and a shocking abuse of fiduciary duty …
“Custos is of the opinion that as major shareholder we have a responsibility to be active and vocal and to fight this sort of mismanagement, breach of fiduciary duty and the culture of greed and self-interest so clearly displayed by a few cozy fat cats interested more in themselves than their shareholders and hard-working employees.
“Custos is proud to be an activist shareholder fighting for all stakeholders’ benefit.
“With Custos increased shareholding of more than 25% we are in a position to be more active and ensure some of the more insane board or adviser actions can be blocked.
“Custos obviously have no confidence in the board or it’s advisers but our increased holding prove that we continue to have confidence in the underlying business.
“Employees, at all levels, have been reaching out to me from within JP, excited by the prospect of change and offering Custos their support.
“They crave new leadership and a proper forward thinking strategy fit for the digital age.”