Companies: DSN   

Densitron Technologies has accused ousted former executive chairman Cliff Hardcastle OBE of past 'irregularities' that 'fall well below the standard of corporate governance'. The company's adviser even alleges that Hardcastle had his wife on the payroll 'for a few years'. All of this has come to light as Hardcastle himself is actually trying to win back control of the company. Ben Cobley reports.

Densitron's current board, chaired by Crawford Gray, with David McQuiggan as chief executive, unanimously voted to oust Hardcastle and then-chief executive Ross Stuart in November. Hardcastle founded the computer displays and electronic parts group in 1972, bringing it to the London Stock Exchange in 1986 and claims he was wrongfully dismissed.

Hardcastle is also trying to wrest back control of techMARK-listed Densitron and has called a shareholders' meeting to have Gray and fellow non-executive Gerald Leahy replaced with himself and an associate, Ian Simpson. Hardcastle and a relative together own 15.6 per cent of Densitron, against the current board's aggregate 0.43 per cent.

Both sides will seek the support other large shareholders. That means courting ubiquitous Swedish entrepreneur Peter Gyllenhammar, who has 11.4 per cent, and Schroder Investment Management, with 10.85 per cent.

At the time of Hardcastle's dismissal, no reason was given publicly. This has now changed.

In a statement today, the board claims 'the company's weak performance was to a considerable and unacceptable extent due to the poor leadership and inconsistent strategies of Mr Hardcastle...Over the past few months the directors have lost trust in Mr Hardcastle as an individual'.

Directors add 'shareholders should be aware that during this time the directors have identified a number of irregularities with respect to [his] management of the group. All these irregularities fall well below the standard of corporate governance expected from a chairman of a listed company.'

The statement says 'directors have noticed a disturbing lack of understanding on the part of Mr Hardcastle that certain of his actions have been improper'. The board is contemplating legal action against him 'with view to recovering amounts owed to the company by him and damages arising from breaches of his fiduciary duties as director'.

The shares fell 6 per cent to 12p.