Sir Stuart changes tune over karaoke stake

Sir Stuart Rose has bowed out of his controversial investment in a karaoke bar company co-founded by Martha Lane Fox, his boardroom colleague at Marks and Spencer.

He told the Investor Relations Society on Thursday he had sold his £100,000 investment in Lucky Voice to allay shareholders’ concerns about the independence of Ms Lane Fox, a non-executive director at M&S.

Sir Stuart, whose relations with his own investors have been soured recently by his proposed elevation to executive chairman, said he had been surprised that the issue of his investment had been raised at a time of serious business challenges. “But to avoid any doubt, I have unwound the investment in Lucky Voice – or perhaps it should be called Unlucky Voice,” he quipped.

Sir Stuart made the investment in January, but when it came to light last month, M&S shareholders pointed out that it could present Ms Lane Fox with a conflict of interest when performing her duties as a member of both the audit and remuneration committees of the board.

Under the code on corporate governance, companies have to explain how a material business relationship between a board member and an executive does not jeopardise independence.

Sir Stuart said Ms Lane Fox was “a very independent-minded woman” and not the sort of individual to be swayed by such an investment.

She is best known for being one of the founders of Lastminute.com, the online travel company, and made a profit of millions of pounds when the business was sold. She joined the M&S board last year.

Sir Stuart also rejected the call from the Association of British Insurers last week, that the retailer should put all its directors up for re-election at its annual meeting each year.

He said the request did not come from the whole spectrum of investors. Other investors were against the idea, and he himself had promised to stand for re-election annually until 2011.

Additional reporting by Tom Braithwaite