Corrects paragraph 2 to show holdings of $1.3 million, not 1.3%

By Alexander Marrow

LONDON, May 6 (Reuters) - A group of Magnum MICCT.AS investors has criticised the ice cream maker over its handling of tensions around its Ben & Jerry's brand's social activism and a lack of transparency over its finances, a letter from shareholders seen by Reuters showed.

The investors, who hold at least $1.3 million of Magnum stock but manage billions of dollars in assets, called on the firm to explain how it would maintain Ben & Jerry's board independence and to provide standalone sales and profit data for the brand.

The pressure underscores how Ben & Jerry's, which has a history of vocal social activism, poses a challenge for The Magnum Ice Cream Company MICCT.AS, which spun off from consumer goods giant Unilever ULVR.L and listed in December.

Ben & Jerry's founders and board repeatedly clashed with former parent Unilever over political and ethical stances. Magnum has since looked to weaken the control of Ben & Jerry's independent board, which has been reduced to just two members. Former directors are challenging Magnum's actions.

CONCERNS OVER BEN & JERRY'S SOCIAL MISSION

In a letter dated May 1, sent to Magnum's board ahead of its May 7 annual general meeting, shareholders led by NorthStar Asset Management expressed concerns over Magnum's management of Ben & Jerry's, saying it risked damaging its business and value.

"They've dismantled the brand's social mission which, for us as investors, is the brand equity," Whitney Nguyen, director of impact research at NorthStar, told Reuters.

Unilever's 2000 acquisition of Ben & Jerry's granted the brand substantial and uncommon freedoms, including an independent board, and preserved the brand's social mission and charitable work. Unilever still has a 19.9% stake in Magnum.

"While we respectfully disagree with the characterisation presented by NorthStar, we are always happy to engage with shareholders and look forward to doing so," Magnum, which also has such brands as Wall's and Cornetto, said in a statement.

"We remain committed to having a Board, led by an Independent Director, to continue its role of helping guide the social mission and brand integrity, alongside the CEO."

Unilever declined to comment.

BEN & JERRY'S: A COMPLEX HISTORY

The relationship between Ben & Jerry's and its parent company began unravelling in 2021 when the Vermont-based brand that has flavours from Caramel Chew Chew to Bohemian Raspberry said it would stop selling in the Israeli-occupied West Bank.

As the demerger approached, Magnum said the chair of Ben & Jerry's independent board was unfit to serve, later accusing her of serious misconduct.

The investors in the letter called for a clear explanation of how Magnum would honour the Ben & Jerry's independent board agreement, calling for a full accounting of liabilities, including ongoing legal proceedings.

"We are concerned that this independent board agreement has been consistently and systematically disregarded," said the investor letter, which was also signed by the major Dutch Association of Investors for Sustainable Development (VBDO).

NorthStar, a socially responsible investing firm, said the handling of Ben & Jerry's may give other brands potentially being acquired by Magnum or Unilever pause for thought.

"The acquisition agreement has been systematically violated — from overriding board decisions, firing the chair and members who disagreed, to censoring the very social mission they were contractually obligated to protect," Nguyen said.

"This is a significant governance failure that erodes shareholder trust and sets a deeply concerning precedent for every brand within the Magnum and Unilever portfolio."