Institutional investors have blocked the appointment of David Nash as the next chairman of Cable & Wireless Plc, and have forced the loss-making carrier to look for someone from outside the company.
Non-executive director Nash was due to become chairman at the end of this year. But after a meeting between directors and shareholders representing a significant proportion of the company’s equity, he has decided to quit the board at the end of December.
Investors have been baying for boardroom blood since chief executive Graham Wallace’s strategy of using cash raised from the sale of traditional telecoms businesses to become a major player in areas like web hosting left the company with massive losses.
Even though C&W was forced to scale back its international ambitions and ditch thousands of unprofitable customers earlier this month, investors remain sceptical about the company’s claim that it will become free cash flow positive by March 2004. With net cash of 2.2bn pounds ($3.5bn), they believe that surplus funds should be returned to investors rather than used to fund continuing losses.