El Corte Inglés expels rebel shareholder and returns to profit

Members of the Administration Committee at El Corte Inglés have voted almost unanimously in favour of the expulsion of the governing body of Ceslar Corporation, the main dissenting voice on the entrance of the new Qatari partner in the shareholding of the company.

Shareholders' Meeting of 2015 of El Corte Inglés has included, among other major changes, the expulsion of Carlota Areces Galán, representative of society Ceslar Corporation (El Corte Inglés’ shareholder with 9 percent of the capital), from the Board of Directors.

Disparity of opinions on the entrance of a new shareholder has triggered the clash

The trigger for the clash between the majority of directors of El Corte Inglés and Ceslar Corporation (the investment vehicle of the Areces Galán family) has been the entry of a new investor in the company, the Qatari Hamad Al Thani, which will have a representative in the management body of El Corte Inglés and the possibility of preferential purchase of treasury shares.

"As a point off the agenda and proposed by the entire Board (except Ceslar Corporation, SL) and by several shareholders, the removal of Ceslar SL Corporation as director of the Company has been approved. This agreement has been adopted by the affirmative vote of all present capital represented at the meeting, with the exception of Ceslar SL Corporation, Carlota Areces Galán and Javier Areces Galán," explains the company in a statement issued last Sunday.

A spokesman for Carlota Areces has indicated that this shareholder will contest the full board and leaving the council. Additionally, she intends to take measures so that everything is annulled "as soon as possible," he noted. El Corte Inglés, meanwhile, has justified that "the indicated proposal for removal was motivated by repeated failures by Ceslar SL Corporation to accomplish its legal duties as administrator". They accuse the Areces Galán’ investment vehicle of airing details of the company to which they had access as a counsellor and should remain secret.

Meanwhile, El Corte Inglés has reported an increase in annual sales for fiscal 2014 for the first time in the last six years. The Spanish chain of department stores improved its revenues by 2.6 percent over the previous year.

El Corte Inglés sold more in 2014 than in 2013, reporting annual income of 14.592 million euros, which meant the fastest pace of growth since 2007.

However, profit was reduced by 32 percent compared to 2013 to 118 million euros.