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One of Britain’s biggest chemical companies has been accused by a major investor of wasting more than £650m on “misguided” investments in green technologies.
In a letter published on Monday, Standard Investments called on the FTSE 250 company Johnson Matthey to clear out its “complacent” board and consider putting itself up for sale.
The US-based shareholder, the investing arm of Standard Industries, criticised Johnson Matthey for splurging £340m on a failed battery material business and more than £310m on various hydrogen production technologies.
It comes amid wider concerns that technologies crucial for Labour’s net zero targets, from hydrogen power and carbon capture to electric cars, are proving unpopular with consumers or extremely difficult and expensive to deliver at scale.
Standard claimed the spending demonstrated a lack of discipline and had destroyed shareholder value in the process.
It said the fiasco called for a refresh of the company’s current board, which it said had proved incapable of turning things around.
The investor, which is Johnson Matthey’s biggest shareholder with 11pc of the business, called for a strategic review of the British company that would consider a potential sale, along with the possible sale of the hydrogen business.
Its letter, addressed to Patrick Thomas, Johnson Matthey’s chairman, said: “As long-term shareholders, we believe in the unique value of Johnson Matthey.
“Over the past two years, we have directly engaged with the board and management regarding the many challenges facing the company and the opportunities which should be seized.
“Despite our patient and constructive approach, the board and management remain complacent and incapable of correcting a misguided strategy that has delivered sustained underperformance.
“Unfortunately, we are convinced that decisive action must be taken.”
Loss-making hydrogen tech
Johnson Matthey announced plans to exit its battery materials business in November 2021, after concluding there was no way it could compete with low-cost and larger-scale rivals.
It ultimately sold the unit for just £50m, after spending £340m on its development, and booked a £363m restructuring charge afterwards.
The 207-year-old company has also made an expensive bet on hydrogen technologies, totalling £310m so far, which remain loss-making.
These include catalyst and membrane technologies designed to make hydrogen production as efficient as possible.
Hydrogen is viewed as a potentially critical technology to the green energy transition because the gas can be burned for power or used to fuel vehicles without producing any carbon emissions.