LV= is planning to bring its status as a Mutual, owned by its members since 1843, to an end by selling it to a Private Equity group based in the United States. In order to achieve this, it must persuade 75% of its members to approve the deal (not ALL of its members, but of those who take the trouble to vote). In return for the loss of their voting rights, members are being offered £100 plus minor top-ups to their policies.
If this deal is approved, future profits, instead of being shared amongst members, will go to the Private Equity group for distribution as it sees fit.
The current directors of LV= are going to great lengths to persuade members to vote for the deal;
1) By sending out voting forms to members advising them to accept the deal;
2) By launching advertising campaigns in newspapers advising members to accept the deal;
3) By telephoning members individually advising them to accept the deal.
All of this is being financed with members` money, as is the £43m paid to City advisers.
The disadvantages of the sale/de-mutualisation are not being explained.
“The pay deals for the directors who stay on running LV= for Private Equity are not being disclosed” (source Private Eye 1561)
The reason given for the sale is that it is necessary in order to secure the future of LV=. The reasons why LV= is in need of such a bail-out (if that`s what it is) are not being disclosed. Maybe shortcomings of its current management bear some responsibility? Its current Chair, Alan Cook, was Managing Director of the Post Office during the peak period (2006-2010) of the wrongful prosecutions of sub-postmasters, several of whom were bankrupted or even committed suicide.
Earlier this year, the Court of Appeal overturned convictions against 39 such people previously found guilty of theft and false accounting, prompting Paula Vennells, Mr. Cook’s successor, to resign all of her board directorships.
How do I vote No?
Online voting is open now and closes on 8 December, so it’s important to cast your vote whilst you can. You can vote by proxy either online or by post. Click here to find the Member Vote Pack and access your unique codes which will enable you to cast your vote.