Monday, January 31, 2000

Oslo Stock Exchange Chairman quits
in NCL take-over row

The Oslo Stock Exchange has issued a statement saying that Ole Lund has decided to resign his position as the Chairman of the Oslo Stock Exchange Board with immediate effect.

It emerges that Lund has been tapped by Star Cruises of Malaysia to become its chairman should it succeed in its battle to take over Norwegian Cruise Line.

The Oslo Stock Exchange statement says:

"The criticism made of Mr Lund in recent days by individuals with a central role in respect of Norwegian Cruise Line (NCL) has led Mr Lund to conclude that it is in the best interests of the Oslo Stock Exchange for him to resign as chairman of the Stock Exchange Board."

Lund, continues the statement, believes that the criticisms are without foundation and that there is no factual basis for the accusation that he has acted in contravention of the Stock Exchange rules on neutrality. "

"We have specific procedures in place to ensure the neutrality of members of the Stock Exchange Board, and as chairman of the Board I have taken particular care to exercise the principle of neutrality in a manner which is beyond reproach", comments Lund.

"In response to a request from Star Cruises I have agreed to accept the position of chairman of the board of that company if it succeeds in its take-over of NCL. I have not been involved in the process relating to the acquisition of NCL. If Star Cruises is successful in this take-over, NCL will in due course cease to be listed on the Stock Exchange and my possible future role as chairman of the company should accordingly not be problematic. In the interim period until any acquisition of the majority of the shares of NCL is concluded and until the company is removed from Stock Exchange listing the question of neutrality would, of course, be dealt with in a satisfactory manner. The reason that I have nonetheless chosen to resign from my position of Chairman of the Board is to avoid both the Oslo Stock Exchange and me personally being subject to less than well informed comments in respect of such important issues as business ethics and neutrality.

"Whilst I am currently a board member of only one listed company, I can foresee a situation in which general interest in my personal situation could become much greater in the future - not only in relation to board appointments but also in relation to my work as a lawyer. I intend to remain in active in business for many years to come, and I do not wish to see the kind of attention which is currently focused on me becoming a burden for me, the legal practice of which I am a partner, or those of our clients which might in future be involved in matters directly or indirectly involving listed companies."

Accepting Lund's decision, he chairman of the Stock Exchange Council, Borger A. Lenth, commented: "I cannot see that the way in which Mr Lund has handled the matter in question conflicts in any way with the
rules on neutrality for the Stock Exchange Board.".

Lund was first elected chairman of the Stock Exchange Board four years ago. His first
term of office expired a year ago and he was re-elected for a further four-year period. He has already let it be known that he would not wish to sit for the entire period of his second term, but would seek to retire
once the Stock Exchange´s international strategic alliance was in place and the new
Stock Exchange Act had been passed. The agreement for an international strategic alliance will be completed during March of this year, and it is expected that the proposal for a new Stock Exchange Act will be put forward for consideration by the Norwegian parliament during the course of this spring's session.

The Deputy Chairman of the Stock Exchange Board, Tom Knoff, will assume the role of Chairman of the Stock Exchange Board until the Stock Exchange Council has elected a successor to Lund.

Shake-up at loss-plagued Lloyd's Register
In an effort to stem operating losses that have recently been running at nearly $3.25 million per month, David Moorhouse, chairman of Lloyd's Register (LR), has announced a major overhaul of the classification society.

While LR's underlying financial position remains strong, says Moorhouse, the changes being introduced are designed to reduce the operating losses in the short term and to return LR to a position of market leadership and financial prosperity in the medium term.

Moorhouse, who was a non executive director of LR for 20 months before becoming an employee last July, has undertaken a complete review of LR's performance.

He revealed that the LR group had been losing market share and incurring losses for the last four years and that the losses had been growing year on year: "It was evident from the review that changes were required to reverse both our declining market share and the unacceptable financial performance.

To date, Moorhouse has discontinued LR's centrally-coordinated industrial inspection business, although local and in-service inspection will continue and even increase where it can demonstrate a satisfactory financial return.

The corporate support function has been reduced significantly and activity, especially in the Information Technology area, not essential to maintaining control and not forming part of the core services, will be outsourced.

Moorhouse is "trying to achieve is one LR, through a new structure capable of delivering our objectives of simplicity, transparency and flexibility. The fundamental components of this new structure will comprise four main business streams, three regional operating groups and a small corporate support facility."

The four global business streams will comprise:

  • Marine,
  • Oil and Gas,
  • Lloyd's Register Quality Assurance (LRQA) and
  • Industry.

Services in these global businesses will be delivered through three geographical regions:

  • Europe,
  • Middle East and Africa;
  • Asia; and
  • the Americas.

The main differences in this new structure are the absence of a central HQ and a significantly smaller and more effective corporate support service. In principle, nothing will be owned or accounted for remote from the business or operating region and nothing will be operated outside the control of the regions.

The global business development team, one for each of the identified business streams, will operate under a business stream director. They will be responsible for global market analysis, strategy, global client support and sales direction and leadership. In addition, they will sponsor new product development, be responsible for operational audit and the development of training needs.

At the same time, service delivery will be controlled by the three regional directors. They will be responsible for delivering the LR services and products, through the local office network. They will be tasked to deliver services of a high technical competence and consistency.

The existing Management Committee and Chairman's Group will cease to exist and the Group will be managed by a team of seven, under the chairmanship of the CEO. The team is Willem de Jong (Europe, Middle East and Africa), David Rule (Asia), John Stansfeld (Americas), Alan Gavin (Marine), Marcus Jones (Oil and Gas), Ian Hodgskinson (LRQA), and Cor Dam (Industry).

In addition to these significant organisational changes, LR plans to establish a realistic and consistent global pricing policy and ensure that such a policy is strictly adhered to. It will seek to realize the very considerable investment that has been made in the IT infrastructure through the delivery of its full potential in support of global services.

Rationalization of the global office network will also play a part in improved efficiency and greater alignment with customers.

Moorhouse concluded: "LR must be significantly more transparent than in the past, both internally and externally, if we are to achieve ownership internally and greater alignment with our customers. Through cooperation, good communication and a real desire to succeed, we will achieve our vision of being the preferred global provider of risk management solutions."

LR's new top management team consists of:

  • David Moorhouse, chairman. Joined LR in July 1999 as chairman designate, becoming chairman in November 1999. Formerly chairman and chief executive officer of Kvaerner Process plc, and member of the management board of Kvaerner.
  • Tim Jones, chief executive officer. Joined LR in 1993 as deputy chairman, having spent 23 years working for BP, latterly as director of BP Oil Europe.
  • Robert Biddle, finance director. Joined LR in November 1999 as Finance director. Formerly held senior financial posts at Eurotherm plc and Siebe plc.
  • Willem de Jong, regional director, Europe, Middle East and Africa. Joined LR in 1963. Appointed LR's country manager for the Netherlands in 1985 and, in 1997, Group regional manager for Europe. Appointed managing director of Marine Division in 1998.
  • David Rule, regional director, Asia. Joined LR in 1971 as trainee ship surveyor, International Conventions. Appointed manager of Construction Services department in 1995 and Group regional manager for North East Asia in 1997.
  • John Stansfeld, regional director, Americas. Joined LR in 1983, becoming manager of Safety Technology department in 1990, country manager for Canada in 1995, and Group regional manager for the Americas in 1998.
  • Alan Gavin, business director, Marine. Joined LR's Marine Hull Structures department in 1974. Appointed manager of Construction Services department in 1997, and manager of Research and Development department in 1998.
  • Marcus Jones, business director, Oil and Gas. Joined LR in 1990 as an offshore surveyor. Appointed general manager of the Aberdeen office in 1996 and in 1998 moved to Croydon to take up the new position of special projects operations manager (Offshore). Became head of Oil and Gas group in 1999.
  • Ian Hodgskinson, business director, LRQA. With a background of 15 years in the metals industries, was a member of the small team which originally set up LRQA in 1985. Appointed managing director of LRQA in 1999.
  • Eur Ing Cor Dam, business director, Industry. Joined LR in 1974 as an engineer surveyor. Became general manager of LRQA in the Netherlands in 1990, deputy country manager for the Netherlands in 1994, and country manager in 1997. Appointed west European area manager in 1998.




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