RAC rejects club fund proposal
English ICA council member Douglas Llambias will challenge the Royal Automobile Club over the sale of its roadside services business, after it rejected his proposal to set up an employee bonus fund.
The idea of the fund was to allow club staff to share in the members’ #450m windfall from selling the rescue business to US company Cendant.
Llambias proposed members each contribute #328 to set up a fund that would pay club staff up to #8,000. The contributions would qualify for tax relief, and so would cost just #263 or #198, depending on the rate of tax relief, he said.
But at a general meeting last Wednesday, RAC chairman Brian McGivern said voting for the motion was a waste of time. If members voted in favour, McGivern said he would exercise proxy votes to defeat it.
‘There seems to be a highly undemocratic and irregular process going on at the RAC,’ said Llambias after the meeting. If McGiven did not explain his actions, Llambias vowed to challenge the sale at a High Court hearing on 2 September.
An RAC spokesman said that Llambias’ motion was voted on and overwhelmingly defeated. ‘There is no issue and no case to answer,’ he said.
Cendant, the US-based marketing services company that is seeking to buy the RAC’s road rescue wing for #450m, last week restated its accounts, lowering 1997’s earnings by $392m (#250m). Accounting irregularities revealed by Arthur Andersen would not affect the sale, said the RAC.