Vince Cable, the Liberal Democrat shadow chancellor, is writing to the chairman of the Financial Services Authority (FSA) to express his worries over the battle for control at Mitchells & Butlers (M&B).
His intervention follows the revelation late on Friday that the Takeover Panel had dismissed claims by M&B that billionaire investor Joe Lewis had been acting in concert with other shareholders to exert his influence on the corporate governance of the pub group (Takeover Panel dismisses M&B claims).
Cable will also sign up to an Early Day Motion which will be filed later today by Labour MP John Grogan, chair of the all-party beer group, in the House of Commons in which he will express concern that Lewis and other minority shareholders, namely Irish horse-racing magnates JP McManus and John Magnier, are allegedly seeking to gain control of M&B.
The motion will express concern over the "apparent threat to the interests of 60,000 small shareholders" at M&B, "where a small group of friends and minority shareholders domiciled outside the UK appear to be seeking to gain control of the company".
Cable was quoted in national newspapers at the weekend saying: "Corporate governance is becoming a political issue. I want to establish whether the FSA is aware of the issue, whether the tests are stringent enough and whether they are concerned about individual investors."
Bitter battle
M&B has been fighting a bitter battle with Lewis, a Bahamas-based billionaire who holds a 23% stake in the pub group through his Piedmont investment vehicle.
Lewis's efforts to force out M&B's board and install his own nominees are thought to be backed by McManus and Magnier, who hold a 17.5% stake through their Elpida fund.
Piedmont and Elpida are in dispute with Simon Laffin, the chairman, over the composition of the board.
They want to appoint four directors: John Lovering, Simon Burke, Jeremy Blood and Mike Balfour
M&B, however, views them as Piedmont candidates and is only recommending shareholders vote for Lovering and Burke. In retaliation, the shareholders are trying to vote Laffin off the board at this week's annual general meeting where fellow director Tony Bates is also up for re-election.
Two representatives of Piedmont, Richard McGuire and Douglas McMahon, left the board late last year, along with fellow non-executives Denis Jackson and Ray Macsharry, after a contretemps which came to a head on 25 November, the day before M&B was due to release its accounts.
M&B claimed the four refused to sign off on the accounts until 11.30 that evening and that the company was very close to having to make an announcement to the stock exchange the following day.
A Piedmont spokesman said at the weekend: "We welcome the unequivocal ruling of the Takeover Panel that shows there was no acting in concert and no breach of the code. We have never sought control of M&B either on our own or with others."