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Letter from US labour groups asks shareholders to eject company founder Michael Dell following SEC investigation which cost vendor $100m

Two US trade unions have written to Dell board members urging them to revolt against founder and CEO Michael Dell at the hardware vendor’s upcoming annual general meeting.

The AFL-CIO and American Federation of State, County and Municipal Employees have called for Dell's removal after a Securities and Exchange Committee investigation into the company's accounting and reporting practices. Among the allegations made against the company were that it received payments from chip maker Intel in exchange for exclusively using its processors in Dell hardware.

As a result of the SEC investigation, Dell was forced to pay out $100 million, although the company neither denied nor admitted the allegations.

The two unions, which together hold a large number of shares in Texas-based Dell, wrote in a letter to the company’s board that shareholders should vote to remove Michael Dell at the AGM on 12 August.

“Based on the allegations in the SEC's complaint against our company and Michael Dell, we believe that shareholders would be better served by the removal of Michael Dell as the chairman of our company's board of directors,” the letter, dated 3 August, read. “By voting to ‘WITHHOLD’ from Michael Dell, you can encourage the board of directors to appoint a new chairman.”

Michael Dell initially served as the vendor’s CEO from 1984 to 2004, when he stepped down from that role. He returned to his position as company chief in 2007.

In response to the trade unions' action, Sam Nunn, presiding director of the Dell board, said in a statement: “Dell’s board reaffirms its unanimous support for Michael Dell’s continued leadership, and the management team in its ongoing commitment to transparent accounting, integrity in financial reporting and strong corporate governance."