Jarvis chief in shock resignation

THE boss of the troubled engineering company Jarvis has announced he is stepping down from the firm after becoming embroiled in controversy over bonus payments to former executives.

Chief executive Kevin Hyde said he believed it was an appropriate moment for him to leave the company after putting in place 'the urgent actions' necessary for its recovery.

Jarvis came in for severe criticism earlier today from the Association of British Insurers, which slapped a 'red-top' corporate governance warning on the group. The move was widely expected to spark a shareholder revolt at the company's annual general meeting next month.

The insurance body was furious that former chairman Paris Moayedi and two other directors ousted since the start of the year, walked away with bonuses for their performance during the year of the Potters Bar crash.

It remains to be seen whether Hyde's resignation will deflect shareholder anger.

Mr Hyde was appointed to the position in May 2003 and guided the group through a major recovery period following its involvement in a string of rail incidents, including the Potters Bar crash.

The group's share price has slumped from a peak of 560p in January 2002 after it warned on profits and breached banking covenants, to today's close of 31 1/4p, 2 1/4p down on the day.

Chairman Steven Norris was all praises for Hyde. 'He has guided us through an intense period of activity to set the scene for recovery,' Norris said.

A team under Alistair Rae, Andrew Lezala and Eric Simonsen will press ahead with the group's restructuring, cost reduction and disposal programme, he added.

At the same time, Jarvis said that Jonathan Agnew, who was appointed a non-executive in November 2003, has decided not to seek re-election at the forthcoming AGM.

Jarvis said it is now looking for successors for Hyde and Agnew.