Activist investor calling for Restaurant Group chair to step down - report

Activist investor Irenic Capital Management is reportedly calling for Restaurant Group chairman Ken Hanna to step down, alleging corporate governance failures and policy violations.

According to letters reviewed by Bloomberg News, Irenic Capital, which holds a stake of about 3%, charged that Hanna has shown "partiality against certain shareholders".

Irenic Capital said Hanna refused to even consider adding an independent director nominated by "the activist community".

Bloomberg said that Hanna told Irenic Capital in correspondence dated 22 June that adding board members nominated by activist investors or a shareholder representative isn’t appropriate or acceptable to "longstanding shareholders".

"Mr. Hanna’s comments make clear that some shareholders - ‘longstanding’ - are more equal than others," Irenic Capital responded in a 23 June letter.

A representative for Restaurant Group, which owns Wagamama, acknowledged to Bloomberg that it had declined Irenic’s request for a board seat.

"TRG constantly reviews the appropriate composition of the board and only last month appointed a new non-executive director in Helen Keays," the spokesperson said. "There are absolutely zero foundations for Irenic’s assertion that TRG’s decline of Irenic’s request for a board seat contravenes any corporate governance guidelines and the chairman enjoys the unanimous support of the entire board."

According to Bloomberg, Irenic Capital said Hanna’s comments were "highly inappropriate" and called the company to set up a subcommittee to investigate whether the nomination committee is biased in evaluating board candidates.

According to Irenic Capital, Hanna violated a London Stock Exchange requirement that a listed company should treat all holders of a class of listed securities the same.

"Should Mr. Hanna not immediately resign, we believe the board must take appropriate steps to exclude Mr. Hanna from further deliberations regarding board composition," Irenic Capital wrote.