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Last Updated: Wednesday, 29 September, 2004, 10:01 GMT 11:01 UK
Jarvis chief executive resigns
Potters Bar rail crash
Jarvis was criticised following the Potters Bar rail crash
The chief executive of Jarvis, the embattled engineering and construction firm, has resigned.

Kevin Hyde, who has held the post since November, said the firm would benefit from fresh thinking now that its financial position had stabilised.

Loss-making Jarvis has drawn criticism over track maintenance at the site of the Potters Bar rail crash and for some of its public sector contracts.

Jarvis faces shareholder criticism over 800,000 in executive bonus payments.

Controversy

"I believe that this is an appropriate time for me to step down, having set in hand the urgent actions necessary for recovery," Mr Hyde said.

Jarvis said it was making "good progress" to restructure the business.

JARVIS SETBACKS
Criticised over track maintenance at Potters Bar
Criticised over school PFI projects in Merseyside
Thrown off Fife school-building project

Jarvis made a loss of 255.7m last year and saw its debts spiral to 230m, leading City analysts to call the firm's survival into question.

The Association of British Insurers advised its members in a note issue on Monday that Jarvis was falling short of acceptable standards of corporate governance.

The "red top" notice - the most serious level of warning - was triggered by two issues, ABI spokeswoman Leonie Edwards told BBC News Online.

She cited concerns over whether the bonus payments were deserved, and Jarvis' own admission in its annual report that it had found failures in internal control procedures.

The ABI routinely health-checks UK firms ahead of shareholder meetings, but it has no regulatory or legal powers. Jarvis is due to hold a shareholder meeting in October.

Tragedy

Jarvis has been dogged by controversy since the fatal Potters Bar rail crash of 2002.

The firm was responsible for track maintenance on the stretch of line on which the fatal accident occurred.

Jarvis has also been criticised for its role in private finance construction and management projects to build schools and university accommodation.

In August, the firm was stripped of a 174m school building contract by Fife Council and has faced criticism for other projects in Merseyside and Brighton.

The firm's financial position has worsened even further in recent months, resulting in a sharp fall in its share price.

Earlier this summer Jarvis admitted that it had breached banking covenants and that it would incur 141m in write-off charges relating to its accommodation services business.

In response, the firm said that it would scale back activities in the area and sell non-core assets. It also negotiated an extension to its overdraft until March.

Steve Norris, Jarvis' chairman, said the firm was actively recruiting a new chief executive.

"We have in place a team..that is taking forward the restructuring, cost reduction and disposals aspects of our recovery and where we continue to make good progress," he said.

Jarvis' shares fell 2.5p to 31.25p on Tuesday.




SEE ALSO:
Jarvis announces higher losses
11 Aug 04  |  Business
Council pulls plug on 174m deal
13 Aug 04  |  Scotland
Council cancels Jarvis contract
05 Aug 04  |  England
Jarvis slides to 246m year loss
30 Jul 04  |  Business
Jarvis 'struggling for survival'
05 Jul 04  |  Business


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