Investor revolt leads Rio Tinto to abandon plans to name Sir Mick Davis as chairman

Investor revolt leads Rio Tinto to abandon plans to name Sir Mick Davis as chairman

Plans to install the Conservative party's chief executive as chairman of mining giant Rio Tinto have been abandoned after an investor revolt.

Sir Mick Davis emerged as the frontrunner two weeks ago to take over the job from Jan du Plessis who is moving to BT Group.

But this week the Investor Forum, which represents shareholders representing around 20pc of Rio Tinto stock, wrote to the company saying that appointing him would be unacceptable.

Other institutions said that if Rio Tinto continued with the recruitment of Sir Mick, they would vote against committee members next year, according to a report by Sky News.

The Tory boss used to be boss of Xstrata, and his emergence as frontrunner surprised analysts and shareholders.

Much of the criticism of Sir Mick from investors stems from his time at Xstrata, over bonus payments paid to the executive team when it was taken over by Glencore in 2012.

Investors were also wary of Sir Mick's history of big takeovers which were deemed not to be suitable for the company which has been saddled with regulatory issues.

After leaving Xstrata, he set up mining investment fund X2 Resources. Later, he became Tory treasurer before being made chief executive of the party in June and had been tasked with a review of the election.

Rio Tinto has said it wants to name a successor to Mr Du Plessis by the end of the year. It was complicated by the fact that the board member in charge of finding a replacement resigned in June after being charged with fraud over his time as Barclays' chief executive.

Rio Tinto declined to comment, and the Investor Forum and Sir Mick Davis could not be reached for comment.

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