Tui AG's majority stake was always going to be enough to ensure a controversial resolution to appoint PwC as auditors was comfortably passed. But after stripping out the Tui AG voting bloc, about 30% of remaining shareholders who cast a vote chose to either vote against the appointment of PwC or abstain.
The behind-the-scenes deal to placate minority investors was brokered at the last minute by Tui's senior independent director, Sir Michael Hodgkinson, in a rushed series of talks with angry shareholders ahead of the meeting.
During the meeting, attended by about a dozen shareholders, Nick Brischetto, of Hermes, asked the chairman if a new audit committee would be given a brief to review the appointment of an auditor, ensuring the firm would be fully independent. In what appeared to be a well-choreographed exchange, Hodgkinson, rather than Frenzel, took the question. It gave him an opportunity to state formally that a new audit chairman – who would be confirmed in two to three weeks – would immediately be asked to review the appropriateness of having PwC as auditor. "We want them not just to look at the quality of the audit, but the independence of our auditor," Hodgkinson said. "He will get completely free run to do the job of an independent audit committee chairman."
Jennifer Walmsley, head of UK engagement for Hermes, explained: "When we talk about an 'independent auditor', in this case we don't just mean independent from the company, but from the majority shareholder." PwC is auditor to Tui AG.
The likely removal of PwC is not expected to be formally announced until a new chairman of Tui Travel's audit committee has been appointed. and had time to conduct an internal review He or she will replace previous committee chairman Jeremy Hicks, who resigned in December, along with fellow committee member Giles Thorley, in protest at Tui's decision to replace KPMG as auditor.The change of auditor came shortly after KPMG had blown the whistle on £117m book-keeping black hole in Tui Travel's British business. Clearly upset at being sacked, KPMG took the unusual step of referring to "increasingly strained" relations between auditors and certain Tui Travel directors over the need to restate past years' accounts
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