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MPs question LV chairman on demutualisation

MPs question LV chairman on demutualisation

MP Gareth Thomas has written to LV chairman Alan Cook about the company’s proposed demutualisation following its sale to private equity firm Bain Capital.

In the letter, dated April 22, the chairman of the All Party Parliamentary Group for mutuals asked Cook about when the option of demutualisation came about as well as questions on his own financial interest and remuneration.

He also asked about past and present chief executive officers and whether they knew about the demutualisation and what caused them to leave the business.

Thomas said the “pertinent related questions” emerged in discussions with members of LV and the APPG’s recent report into the deal with Bain Capital.

LV first announced the sale of its savings, retirement and protection businesses to Bain Capital for £530m in December.

The MP said Cook had emerged as “the one constant” in the leadership of LV throughout, including during its conversion to a company limited by guarantee in May 2019, a change of CEO and the recent deal with Bain Capital.

Thomas said: “There are growing questions about Mr Cook’s role in some of the key moments that have led to this proposed demutualisation.

“Member owners of Liverpool Victoria are entitled to know if Mr Cook benefited from the sale to Bain Capital. 

“Previous demutualisations have seen the quality of products and services for customers decline whilst the pay of the business leadership has rocketed.”

Thomas hopes that the LV chairman will provide a full response to his questions ahead of an upcoming briefing meeting for members of LV, which is set to take place next week (May 4).

An LV spokesperson said: “We received the letter from Gareth Thomas MP yesterday (April  22) and will be responding in due course”.

Earlier this month (April 7), MPs criticised LV’s plans saying the deal with Bain Capital had been rushed and that the company has not been “open and transparent” with its members about its intentions.

The report from the APPG said despite repeated assurances there was no intention to alter the mutual status of the company, and it was clear that plans were in place to “seek alternative arrangements” which included a change of corporate status, if not full demutualisation.

Back in September there were reports Royal London was looking to take over LV to create a large-scale mutual.

But LV quickly confirmed it was in exclusive talks with Bain Capital and was not talking to any other businesses.

Earlier in June it was reported LV had sought advice as to whether the sale of its life and pensions business would be in the best interest of it 1.3m customers.

It also said it was looking into a joint venture option, similar to the one it struck with German insurance giant Allianz when it sold its general insurance business in 2017.

amy.austin@ft.com

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