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Wednesday, January 20, 1999 Published at 14:54 GMT


Business: Your Money

Portman joins carpetbagger defiance

Portman closes its doors to carpetbaggers

Portman Building Society is the latest mutual to rejects attempts to convert it to a bank.

Portman has blocked moves by carpetbagger Michael Hardern who had applied to stand for election to the society's board and put forward a direct conversion proposal to be put to members.

Both tactics were thrown out by Portman on the grounds they were at odds with the society's rules.

Portman's decision follows similar action by Yorkshire Building Society on Tuesday and Britannia on Monday.

Ken Culley, chief executive of Bournemouth-based Portman, said: "Our legal advisers have confirmed that Michael Hardern's nomination for the board and the conversion resolution are both invalid and the board will not be putting either to the members."

1974 protection

Now Portman, Yorkshire, Coventry and Britannia building societies have used a 1974 ruling - Hickmott versus Woolwich Equitable Building Society - to thwart conversion votes being forced. The ruling says a resolution that interferes with the exercise of the managerial powers can be rejected by the board.


[ image: Portman follows Yorkshire's lead]
Portman follows Yorkshire's lead
While three have also rejected Mr Hardern's candidacy for their boards on a pro-conversion ticket, Britannia has allowed him to proceed.

Portman turned down Mr Hardern's application to stand for the board on the grounds that he did not have enough valid nominations from members. At the Yorkshire he failed to attract the 50 valid nominations required to stand as a director.

Britannia members will elect their board at an annual meeting in April while members of Bradford & Bingley, the country's second biggest building society, will vote on a conversion resolution in April.

The Leeds & Holbeck, Chelsea and Skipton Building societies have also been targeted by Mr Hardern but have still to announce their decisions on his plans.

Fight goes on

Self-styled carpetbagger Mr Hardern says he is determined to unlock windfall payments from the remaining mutual societies.

On Tuesday, Mr Hardern said he had been "caught in the slips, but looked forward to a second innings next year", referring to Yorkshire's rules which prevent another conversion attempt for twelve months.

He said mutuality offered most members less than £10 a year, while conversion payouts could exceed £1,000.

Mr Hardern has urged members to vote against the boards at any uncontested elections to express their disapproval of the move to deny them the opportunity to vote for windfalls.

Most of UK's remaining building societies are opposed to conversion challenges. They say they can offer investors and home buyers better rates if they remain mutuals.





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