Kingsway Sets Shareholders’ Meeting to Vote on CEO’s Removal

Kingsway Financial Services said it has called a special shareholders’ meeting for Feb. 10 to deal with a shareholder’s attempt to replace the company’s chairman and chief executive.

Kingsway said it held discussions in late November with investor Joseph Stilwell and his associates.

The New York-based Stilwell Group said last month that it owns 8.4 percent of the company’s shares.

The group wants to replace Kingsway Chairman Michael Walsh and Chief Executive Shaun Jackson with its own nominees, Kingsway said in a statement Tuesday.

The group’s request for a meeting “will cost the company significant time and expense,” Kingsway said, adding that it will urge shareholders to vote against the executives’ removal.

Shares of Kingsway, which sells auto and truck insurance, closed at C$5.66 (US$4.44) on the Toronto Stock Exchange Tuesday. The stock is down 53 percent in 2008, compared with a 40 percent drop in the S&P/TSX financial index.

Kingsway director Thomas Di Giacomo said that the board and management have taken “decisive actions to address the under performing parts of the company’s business.”

But the Stilwell Group has said the company should do more to cut costs and sell non-core businesses, and it said on Nov. 24 that the removal of Jackson was “non-negotiable.”

On Nov. 21, Kingsway said it will work with financial advisers on “a number of matters” but it did not provide further details.

($1=$1.25 Canadian) (Reporting by Lynne Olver; editing by Rob Wilson)