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BUILDING societies are not supposed to be like this. Friendly, yes. A bit dozy and old fashioned, perhaps. But not angry Goliaths prepared to use their huge might to crush anyone who dares speak out against them. Yet one of the country's biggest building societies is now spending tens of thousands of pounds trying to silence a customer who dared to question the £400,000-a-year boss's relationship with an employee half his age.
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Portman building society has threatened litigation against one of its members in an unprecedented move that could strip him of his livelihood and home. Lawyers who have seen the documents, obtained by Financial Mail, describe the move as 'brutally heavy-handed'.
The furore centres on Robert Sharpe - the society's 54-year-old chief executive - and allegations surrounding his relationship with 27-year-old blonde Cheryl Binnis, a graduate employee at Portman.
The affair has been known about by senior Portman employees for more than six months and the couple have been seen together at Sharpe's waterfront apartment in Bournemouth, near Portman's HQ.
Binnis, who graduated from Oxford with a first class degree, joined the society in October 2000 on its fast-track programme and has since been promoted twice.
It was her rapid rise that prompted disgruntled member Tim Tanner, an electronics engineer from Camberley, Surrey, and an independent candidate for Portman's board, to fire off questions about the couple's relationship at the society's AGM in April.
Tanner had been tipped off about the affair in an anonymous note sent to the Building Societies Members Association. The note, among other things, said: 'Mr Sharpe was able to appreciate Miss Binnis' good looks and affectionate personality and he was able to identify the unique qualities that warranted her promotion'.
Confronted by Tanner at the AGM, an embarrassed society chairman, John Roques, publicly confirmed the relationship, but denied any professional impropriety had taken place.
This admission that a staid building society was providing the backdrop for the liaison between Binnis and Sharpe, who is separated from his wife, Barbara, became hot news - and not only in Bournemouth. The national media eagerly pounced on the story.
Tanner, who has objected to Sharpe's management of Portman on a number of issues, such as branch closures and executive pay, referred again to the relationship in articles posted on a website and distributed via e-mail.
But now Portman is threatening to sue Tanner over the Press and internet coverage. He is accused of engaging 'in a campaign of defamation, denigration and vilification of the directors'.
Acting through £400-an-hour solicitors Addleshaw Goddard, based in London, Portman has issued a series of demands.
It wants Tanner to retract his comments, apologise in court and pay unspecified damages and legal costs. It is also demanding that Tanner supply Portman with details of all the journalists he has contacted.
In a seven-page document outlining its allegations against Tanner, the society claims all he wants is to ensure that 'the society is demutualised to [his] financial benefit'.
Asenior figure in the building society community, who did not want to be named, said: 'Portman and its lawyers have made this attack as toxic and as terrifying as they could. Their clear intention is to be rid of this man permanently.
'They could justify doing so by saying that Tanner is damaging the society's reputation, which in turn damages members' interests.
'But one must question whether this is really about the damage to the society's reputation or the damage to Robert Sharpe's.
'If it is primarily the latter, is it appropriate for the society's assets to be tied up in litigation?'
Facing such an onslaught, Tanner, a father of two, is believed to be in talks with his own lawyers.
He refused to speak to Financial Mail last week, but in the past he has denied that he supported the demutualisation of any building society.
A close friend said: 'It's ridiculous to suggest Tim is after windfalls. He campaigns because he believes in it. He does not want Portman to demutualise.
'The money he spends campaigning for change is far out of proportion to the few hundred pounds he'd get from windfalls.'
Though battles between mutuals and rebel members are often bitter and public, the firms involved usually resist legal action against individuals.
The closest any mutual has come to deploying this scale of defence was in 2000 when Standard Life, under attack from policyholder Fred Woollard, engaged a private detective to investigate his business interests.
Portman is the fourth-largest society with 1.3 million customers and 1,129 employees.
Its legal onslaught against one of its investors is likely to embarrass the entire building society movement, which is struggling to demonstrate that it has a caring approach focused on members in contrast to the hard-nosed tactics of the big shareholder-owned banks.
And the David and Goliath battle has erupted as building society board members - immune from the strict, new disclosure rules applying to bank executives - are trying to dampen growing criticism over boardroom pay and a lack of accountability.
Portman group development director Matthew Wyles said: 'We cannot make a comment on these allegations. It would not be proper to comment on a private matter between the society and one of its members.'
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