April 1 (Reuters) - The chairman of Spanish defence firm Indra, Angel Escribano, is set to resign from his position at an extraordinary board meeting later on Wednesday, according to El Economista
Indra names new chair as Escribano exits over failed deal with own company
Leadership Changes and Shareholder Tensions at Indra
By Gemma Guasch
April 2 (Reuters) - Spanish defence firm Indra appointed Angel Simon Grimaldos as non-executive chairman and director on Thursday, a day after Angel Escribano resigned following a failed deal with his own company and reported government pressure for his exit.
Appointment of Angel Simon Grimaldos
Simon, former CEO of Criteria Caixa, was nominated as chair by state-owned fund SEPI, which holds a 28% stake in Indra, according to a report by Spanish paper La Vanguardia.
Escribano's Resignation and Conflict of Interest
Background of the Failed Deal
Escribano handed in his resignation on Wednesday, saying that staying on could "jeopardise the company’s stability", two weeks after Escribano Mechanical and Engineering (EM&E) withdrew from a potential acquisition by Indra due to a conflict of interest.
EM&E has a 14.3% stake in Indra, making it the second-largest shareholder behind SEPI.
Impact on Indra's Management
Indra said on Thursday Jose Vicente de los Mozos would continue as chief executive officer.
Market Reaction
Indra shares went on a roller-coaster ride on Wednesday after several news outlets reported Escribano was about to resign, but closed 3% higher before his exit was confirmed. They fell 3% in early Thursday trading.
Ongoing Tensions Between Shareholders
SEPI and EM&E Disagreements
Escribano, who owns EM&E together with his brother Javier, and SEPI have been at loggerheads over the failed Indra-EM&E deal and the conflict of interest, which SEPI had previously asked Indra to resolve among shareholders.
Escribano's Statement
Letter of Resignation
“The events of recent weeks have created a situation which, aside from the personal strain, threatens to undermine the objectives that have driven me from day one and which I consider essential for the future of Indra and the sector,” Escribano said in his letter of resignation.
Government Involvement in Strategic Companies
The Spanish government has been taking a more active role through SEPI in companies it considers strategic, helping to replace Telefonica's previous CEO Jose Maria Alvarez-Pallete with Marc Murtra, who previously chaired Indra.
The government has publicly said it was not aware of a conflict of interest when Escribano was appointed chair.
(Reporting by Gemma Guasch; editing by Andrei Khalip and Milla Nissi-Prussak)
