The positions of the senior directors at Mitchells & Butlers (M&B) look increasingly untenable after the pub giant incurred a £274m post-tax loss from the closure of its controversial hedge fund.
The O'Neill's and All Bar One owner today revealed it made the massive loss on hedging investments that were made in connection with an aborted joint property venture with tycoon Robert Tchenguiz's investment vehicle R20.
Karim Naffah, M&B financial officer, will leave M&B by mutual agreement with current deputy financial officer Jeremy Townsend taking his place. While chief executive Tim Clarke has had his offer to resign declined by its board. All directors at the company will have to forego their bonuses as a result of the large losses.
Mark Brumby, an analyst at Blue Oar Securities, said the £274m loss was a "monumental, career-ending debacle of the first order".
In a statement, M&B said: "Management, supported by advisers and the Board, acted professionally and diligently in the preparation of the financial package for the proposed joint venture with R20 and the subsequent retention of the hedge, but fell victim to the global credit crunch which began in the midst of the final execution of the transaction."
Despite the debts incurred M&B said it would, if market conditions recovered sufficiently, "seek a structure which successfully demonstrates the full value of the property".
Christmas food sales at M&B were up 4.6% while drink volumes declined by 1.1%. Sales in Scotland, where the smoking ban is in its second year, were up by 4.4%.
By Christopher Walton
E-mail your comments to Christopher Walton here.