Following is a letter sent to the Editor of the Financial Times:
Sir,
In order to receive approval from the Arcelor Board, Lakshmi Mittal agreed to take the non-executive Chairman´s position and have his son as the only member of the family represented on the management team (¨Mittal takes top job at Arcelor¨ Financial Times, November 6 2006). With this agreement, he received the recommendation of the target Board and removed the uncertainty that existed prior to the shareholder vote.
This agreement converted his hostile takeover into a friendly and allowed him to save having to follow the alternative route to ensuring success, paying more.
His move to take over the CEO position, to eliminate confusion is clearly an excuse, as nothing has changed from the original agreement to lead to any new confusion that may have existed.
Now there is the likelihood that he will soon have both, the chairmanship and the CEO positions.
Good governance is going downhill by the day.
Onésimo Alvarez-Moro
See article:
Lakshmi Mittal is taking over as chief executive of Arcelor Mittal, replacing Roland Junck, the newly-merged steelmaker said on Monday.
Mr Mittal, who at the time of the merger said he would content himself with a non-executive position, is currently president of the board of directors, but the group said it was making the changes to “clarify the leadership” of the company, the world’s biggest steel company.
Mr Kinsch, chairman of the board of directors, said: “It had become clear over the past months that the interests of the company were not best served by the previous structure. The board is confident his [Mr Mittal’s] leadership will deliver the considerable potential of Arcelor Mittal.”
Mr Mittal is expected to step up to the position of chairman when Mr Kinsch retires next year. It is understood that at that time the role of chief executive will pass to someone else.
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