A leading shareholder at engineering group Tomkins last night said investigations into alleged financial irregularities needed to be "dealt with" and vindicated its moves to shake up the company's boardroom.
Hermes Pension Management, which controls 5% of Tomkins, believes its campaign for Greg Hutchings to split the role of chairman and chief executive and bring in new independent non-executive directors such as Sir Brian Pitman has been justified.
Peter Butler, a director at Hermes, said: "This highlights the importance of strong non-executive directors. With those in place we can be confident that any statement [on board irregularities] will be final and any appropriate action needed will be taken."
Shares in Tomkins fell 3p to 166p yesterday after the company put out a formal notice confirming an inquiry into the perks and expenses of chief executive Mr Hutchings, who was paid £1.45m last year.
Mr Hutchings' future now looks precarious with one well-placed source saying only: "He has a better chance of survival than Milosovic."
The company said: "Follow ing recent press speculation and allegations relating to certain board practices at Tomkins, the chairman, David Newlands, can confirm that a full review of both historic and current practices is now underway."
The statement added: "This review will be completed as soon as possible."
Arthur Andersen, the company's auditor has been asked to look at allegations which include accusations that Mr Hutchings' wife and housekeeper both appeared on the company payroll in the past.
The auditor is also understood to be looking into donations - £40,000 annually - to a charity, United Response, run by a friend, and the use of four jets owned by Tomkins but leased to a Farnborough-based operator.
Hermes said it was anxious the investigation was dealt with as soon as possible. "None of this is doing any good for shareholder value but it clearly needs to be dealt with," said Mr Butler.
In the 1980s and 1990s, Hutchings was the driving force behind the growth of Tomkins, whose businesses include making windscreen wipers, handcuffs, handguns and shoes.
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