Shareholders heckle Affolter at Kuoni AGM

Affolter found his path blocked by security guards Keystone

The suspended chairman of Switzerland's Kuoni travel group, Daniel Affolter, was physically barred from chairing the company's annual general meeting on Tuesday.

This content was published on May 16, 2001 minutes

Security guards at Zurich's congress house blocked Affolter as he tried to make his way to the rostrum, forcing him to take a seat in the front row of shareholders. The deputy chairman, Heinz Müller, then took the lead.

The action was seen as a symbolic victory for board members who want to remove Affolter from office, in what has become a bitter power struggle within Kuoni.

The battle for control broke out just over a week ago when five of the eight company board members demanded his resignation, accusing him of awarding himself payments of millions of francs from the Kuoni and Hugentobler foundation, which holds 25 per cent of the company's voting rights.

The board is also filing criminal charges against Affolter for "disloyal conduct of business".

Similar charges have been levelled at Alfred Kuoni, who set up the foundation in 1957 to try to ensure the company's independence.

The board says it is concerned that the foundation, which practically controls Kuoni, had been entrusted to people who were placing their personal interests above those of the company, its staff and shareholders.

Deputy chairman Müller said that measures had been taken to secure an orderly meeting and that Affolter was being "physically stopped from taking a place on the podium".

He added that a clear majority of the board had decided to suspend Affolter from office. However, Affolter was allowed to address the meeting in his capacity as a shareholder.

Affolter was booed from the floor when he said that Müller's words had been "impressive but not factual".

However, Affolter received some support from fellow board member Geoffrey Lippman.

Lippman told swissinfo that he didn't like the way the investigation by the five board members into Affolter had been carried out.

"A small group of people obtained information. Some of that information was taken out of people's offices," said Lippman. "Mr Affolter was not given information about this for two months."

Lippman echoed concerns raised by the chairman about the Kuoni board's involvement in the affairs of the foundation.

"I take no position on the issues concerning the foundation and I asked this specific question: Do these issues affect the affairs of Kuoni the company? The answer is they do not," Lippman said.

However, one of the other board members involved in the investigation, Gilbert Probst, told swissinfo that he felt the investigation was carried out correctly, although he admitted it was not possible to tell everyone what was going on.

"Mr Lippman was informed last for many reasons. He is not a member of the audit committee and of course we knew he was a very good friend of Mr Affolter," explained Probst.

Although the row broke out too late to include it on Tuesday's agenda, the meeting showed that shareholder sentiment was certainly more in favour of the Kuoni board than of Affolter. An extraordinary shareholders meeting in July is being scheduled to decide if Affolter should go.

Affolter suffered a setback last Friday when the authorities supervising foundations in canton Zurich said the Kuoni and Hugentobler foundation had to vote in line with proposals recommended by the majority of the Kuoni board or abstain.

This led to Affolter's resignation as head of the foundation, although he has insisted he will stay on as chairman of the company.

He accuses his opponents, including the group's chief executive Hans Lerch, of trying to oust him and to soften up Kuoni for an outside takeover.

In a further twist last week, the Kuoni and Hugentobler foundation itself launched proceedings against deputy chairman Müller.

Papers were lodged in Zurich accusing him of breaching commercial secrets and suppressing information.

Although Tuesday's meeting may be seen as a symbolic victory for the board at Kuoni, there are fears that the bickering will continue between the two sides. That is expected to be detrimental to Kuoni's image on the Swiss stock market, where its shares have already taken a pounding.


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