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Shareholders of Eurotunnel oust CEO, board

SHARE Shareholders of Eurotunnel oust CEO, board

VILLEPINTE, France — Rebel shareholders ousted the chief executive and the entire board of the company that operates the underground rail tunnel between Britain and France on Wednesday, angry over the company's huge debt and failure to attract more travelers.

In a revolt of historic proportions by individual investors, they promptly installed a new French chairman and other board members of Eurotunnel Group.

Over 63 percent of shareholders voting at the meeting outside Paris backed the dismissal of Eurotunnel CEO Richard Shirrefs, chairman Charles Mackay and the nine other members of the Eurotunnel board.

The shareholders also voted overwhelmingly to appoint six new French directors headed by Jacques Maillot, the founder of French tour operator Nouvelles Frontieres, who is to take over from Mackay as chairman.

"This team no longer has the confidence of shareholders," Maillot said just before the vote.

He said further nominations of new British, Italian and Belgian directors would be announced in coming months.

Shirrefs had already left the meeting without making any comment after a management proposal to renew his mandate was defeated in an earlier vote. Mackay conceded defeat as he opened the first of several marathon sessions with the angry shareholders.

"We don't have a majority of the votes cast," he said, amid jeers and whistles from assembled investors.

A French court ordered the ballot in December after a long-running campaign by small shareholders' group Adacte to change the management of the Anglo-French company.

The operator of the rail tunnel linking Britain and France announced late Tuesday that leaders of the shareholder rebellion had won a large majority of proxy ballots ahead of the ouster vote.

The mutiny gained momentum last year with the arrival of French entrepreneur Nicolas Miguet, who used his investment publications and premium-rate telephone advice line to encourage small investors to back his alternative vision for the company.

The rebels accused Eurotunnel's outgoing management of not doing enough to rein in the group's 9 billion euro ($10.8 billion) debt.

The nomination of French former Euro Disney boss Philippe Bourguignon to succeed Mackay as chairman — announced by the company last month in a bid to appease Miguet's followers — was overwhelmingly rejected by the shareholders.

The new directors appointed under Maillot's planned chairmanship are all French, and all relatively little-known.

Herve Huas, set to take over as chief financial officer, is a former head of private banking at Belgian banking group Dexia.

Jean-Louis Raymond, the new chief executive, is described as a "crisis management specialist" with turnaround experience at French food companies including Lesieur and Beghin-Say, the sugar giant.

Eurotunnel's woes go back to the so-called "Chunnel" project's launch in the late 1980s, when Britain's then-Prime Minister Margaret Thatcher vowed that "not a public penny" would be spent on the project.

"There is too much debt," Shirrefs told shareholders Wednesday, once the jeering died down. "There was too much debt from the start."

Shirrefs, who took over as chief executive in 2001, also acknowledged that there had been "errors in the forecasts from the beginning."

At the tunnel project's 1987 launch, Eurotunnel promised investors annual passenger traffic of 30 million from its opening — planned for 1993 but eventually delayed until the following year.

Last year, the number of passengers passing through the 30-mile tunnel on high-speed Eurostar trains and vehicle-carrying shuttles came to 15.6 million, according to company figures.