Cornfeld Dumped

Bernard Cornfeld, former social worker and founder of the world's largest mutual fund complex, last week joined the army of the unemployed. Shareholders of his Geneva-based Investors Overseas Services, Ltd. gathered at the annual meeting in Toronto to elect a chairman and directors, and Cornfeld failed to attract enough votes for a seat on the board. The new chairman is Sir Eric Wyndham White, 57, who has acted in that role since Cornfeld was ousted as chief last May.

Speaking in an unruffled monotone, Sir Eric chaired the six-hour Toronto meeting. "We do not seek and we do not need rescuing," he said. Then he added quickly that I.O.S. would be more than willing to take in some partners if they offered managerial assistance and short-term capital "to tide us over any temporary cash shortage in the immediate future."

Wyndham White stressed that I.O.S. is not insolvent but was simply faced with an inopportune cash shortage caused by too optimistic overexpansion. He assured stockholders that--by "reformulation, restructuring and streamlining"--new management would cut I.O.S.'s inflated operating expenses by 50% by the end of the year. He also maintained that I.O.S. had not done badly at all in the context of the entire mutual fund industry. "I should point out," said Wyndham White, "that from November 1968 to the end of May 1970 the drop in the total assets of U.S. mutual funds was 28%, while the decline for I.O.S. was only 19%."

What I.O.S. needs most is to win back the faith of bankers and investors, and Wyndham White could be the man to do it. Knighted two years ago for distinguished service in international affairs, he was first secretary of the British embassy in Washington during World War II. From 1948 to 1968 he was with the General Agreement on Tariffs and Trade (GATT), serving the last three years as its director general. Then Cornfeld recruited him as a celebrity to bolster I.O.S.'s prestige. Now, said Wyndham White, Cornfeld has "receded into the position of a minority shareholder." Though Cornfeld is still I.O.S.'s largest single shareholder, with 15% of the voting power, he has made no immediate plans for a comeback.

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