Rock denies chairman is ready to join insurer Pearl

Sep 9 2009 by Peter McCusker, The Journal

NORTHERN Rock last night moved to quash speculation it will be losing its chairman Ron Sandler to recently revamped life insurer Pearl.

Speculation was rife yesterday that Mr Sandler would be joining Pearl as its executive chairman, this follows recent rumours that he was one of the favourites for Sir Victor Blank’s job as chairman of the Lloyds Banking Group.

One report suggested his appointment as executive chairman of Peterborough-based Pearl will be confirmed close to the announcement of its half-year results at the end of the month.

However, Newcastle-based Northern Rock last night issued the following statement: “We can confirm that Ron Sandler remains fully committed to his role as non executive chairman of Northern Rock and we do not envisage that changing in the foreseeable future.”

Mr Sandler was confirmed as the executive chairman of Northern Rock in February last year and has since been credited with steadying the ship and outlining a path for a future out of state ownership.

He has a record of being one of the City’s most effective troubleshooters. His most notable achievement was saving the Lloyd’s of London insurance market in the 1990s when it was brought to the brink of collapse by years of claims.

Pearl – the so-called “zombie” insurer because it consolidates closed life insurance businesses – was originally set up by entrepreneur Hugh Osmond, who amassed a fortune through businesses including Pizza Express and Punch Taverns.

But in June this year Liberty, an acquisition company set up by hedge-fund billionaire Nicolas Barggruen, took a 60% stake after injecting £500m.

A debt-for-equity swap also placed 10% of the company into the hands of a consortium of 17 banks, and 30% remained with Mr Osmond, through his investment vehicle Sun Capital and the private equity group TDR Capital.

The Northern Rock is currently waiting to hear if it will get the go-ahead from the European Commission to split itself into two to help facilitate its return to the private sector.

Sir Victor Blank is standing down from Lloyds next year following criticism of his part in its merger with HBOS, which led to the taxpayer taking a 43% stake in the bank last year.