The chairs of trustees for the three Premier Food pension schemes have accused Oasis Management Company of “destabilising” the delivery of the pension scheme promise to its members, following the investors attempts to oust CEO Gavin Darby.

In a letter to Oasis, which was also sent to The Pensions Regulator, RHM Pension Scheme chair Allan Course, Premier Foods Pension Scheme chair Michael Chatterton and Premier Grocery Products Pension Scheme chair David Curtis, all stated their concerns over prospect of changing the company strategy towards “short-termism”.

In June, the Hong-Kong-based investor, which owns 9.34 per cent of Premier Food’s shares, expressed its intention to vote against Darby at the company’s AGM 18 July, and “may encourage others to do the same”.

The letter said: “The trustees note with concern the various announcements which have been made by the company and by Oasis. As you are well aware stable, consistent leadership and strategic execution are considered vital ingredients in the delivery of the pension promise to our members. As such, we wish to express significant concern with respect to our current position.

“We are concerned at the suggestions that the current CEO should be replaced in order to effect a change in strategy and wish to place on record that we consider the risks associated with a change in leadership at this current point could be destabilising from an employer covenant perspective.”

The trustees also warned against increasing shareholder returns, noting that it would be viewed “extremely negatively” and that maintaining a business of scale is “fundamentally important”.

According to its final results for the year end 31 March 2018, the RHM schemes had a surplus of £754m, and the Premier Foods schemes had a deficit of £437m on an IAS 19 accounting basis.

The board have been steadfast in their support for Darby, and in a statement said: “The board unanimously recommends that shareholders vote in favour of Gavin Darby's re-election as the chief executive officer at the Company's AGM and will communicate further in due course.

Darby was appointed CEO of Premier Foods in February 2013, when the company had a net debt of nearly £1bn.

Premier Foods’ chairman, Keith Hamill, said: "The board believes that Gavin Darby is running the Company well. In contrast, the Oasis proposal offers no constructive solution to the challenges being addressed and involves the risk of creating instability at a time when continuity is important in completing the work being done.

“The Board unanimously recommends that shareholders vote in favour of Gavin Darby's re-election as CEO at the AGM on the 18th July 2018."

Oasis raised its stake in Premier Foods in October 2016.

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