Standard Life faces threat from within

Europe’s largest mutual life insurer Standard Life is facing a new threat from a member who wants the society to demutualise, it emerged today.

David Stonebanks, a retired electrical engineering teacher, claims he has enough backing from members to call an extraordinary general meeting to vote on demutualisation.

Mr Stonebanks, from Hertfordshire in England, says he now has support from 1,600 of Standard Life’s 2.5 million policyholders, and he is expected to use the society’s annual general meeting in Edinburgh on Tuesday to gain further support.

But Mr Stonebanks must wait until July before a meeting can be called, as under the society’s rules there must be at least three years between demutualisation bids.

The society’s status last came under threat in July 2000 when fund manager Fred Woollard tried to force it to become a listed company, but his proposal was backed by only 46% of members, well short of the 75% he needed.

Mr Stonebanks met Marcia Campbell, managing director of human resources and company secretary of Standard Life, at the end of March.

Ms Campbell said today: “The board is thoroughly of the view that remaining mutual is in the best interests of the company.

“Members voted overwhelmingly in favour of remaining mutual less than three years ago, so we do not think it is a good idea to be forced to spend money on something members voted on so recently.

““Last time we spent £11m on this process and I don’t think members will be pleased about us being forced to spend a significant amount again.”

Policyholders hoping for a large windfall are also likely to be disappointed.

Mr Stonebanks estimates that, if the company did go ahead with a demutualisation, every member would get at least £750 (€1,084) worth of shares, with some people qualifying for more depending on how much money they had invested in the society.

But the figure is well down on the £6,000 (€8,673) Mr Woollard promised members three years ago, although Standard Life claimed both figures were too high as they failed to take into account people who were members of the society through pension schemes.

Mr Stonebanks has also called for 2% of the total shares issued to be donated to charity and 1.5% to be allocated to Standard Life staff.

He also wants “additional shares to the value of half of one penny per member” to be allocated to himself to cover his costs and recognise the time he has spent on its campaign, which would amount to around £12,500 (€18.070) worth of shares.

Standard Life has fiercely defended its mutual status in the past and recently changed its rules to make it more difficult for carpetbaggers to force the board to hold a vote on demutualisation, raising the number of signatures need to support a resolution from just 50 to 1,000.