YORK credit card insurer CPP could be facing operational changes after receiving a "surprise" call by a group of shareholders for four directors to be replaced alongside the announcement of more than 20 redundancies at the firm.

The Holgate-based group, which employs 550 people at its head office in the city, has confirmed it is in consultation with 22 members of staff within its operations function in York, as well as other roles in its international operations.

The company said the "regrettable" move is the result of a review of staffing requirements in light of continued restrictions placed on CPP by the Financial Conduct Authority, prohibiting the group from selling to new customers in the UK after being fined £10.5 million by the Authority in 2012 for mis-selling.

The redundancies have been announced as CPP revealed it has received notice of a general meeting requisition, proposing that chief executive Stephen Callaghan, chairman Roger Canham and non-executive directors Shaun Astley-Stone and Abhai Rajguru are removed from the board, and to have Sir Richard Douglas Lapthorne, Nicholas Ian Cooper and Mark William Hamlin appointed in their place.

The motion is being put forward by Schroder Investment Management, acting as discretionary manager on behalf of clients who are holders of more than five per cent of the paid up capital of the company carrying voting rights at general meetings.

In a statement issued by CPP today, the firm said it was "surprised by the requisition given that the company's overall performance has been strong, and significantly ahead of of previous market expectations", adding that "the board does not believe the actions proposed would be in the best interests of CPP's customers, employees or other shareholders".

CPP said it understood that Schroders and Sir Richard Lapthorne are working together with Hamish Ogston, founder and chairman of the company until 2005, and thereafter a member of the board of directors throughout the period when the company was subject to the FSA investigation and subsequent censure as a result of a mis-selling scandal that saw the York firm landed with a record fine and paying out £65.8 million in compensation to customers.

Mr Ogston remains the largest individual shareholder in the company, but currently has no management or operational control over the business.

CPP says that if the proposed resolutions are passed, all of the company's non-executive directors will have been proposed by Schroders, "and will lack experience of the business", as well as any prior board-level experience of regulated financial services businesses.

Stephen Callaghan, who has been chief executive at CPP since April last year, told The Press: "The business has achieved a terrific amount in the last 14 months. It is a testament to the staff both in York and globally.

"The board remains committed to the strategy that we have developed that has driven this recovery and ensured we continue to be in York and contributing to the local economy.

"My focus as chief executive is unchanged in turning this business around.

"Our half year results were better than expected, and it is very much business as usual for us thanks to a fundamental effort by the team, particularly over the last year."

Last year saw the firm secure new equity funding of £20 million in February and a refinancing of the Group’s debts. CPP then returned to profitability in 2015 reporting underlying operating profit of more than £2 million for the half year.

The company said its full year financial results, due to be announced on Thursday, show "a continuing improvement in performance, with profits materially higher than those expected, reflecting a significant turnaround in performance under the current leadership".

Following the requisition from Schroders, CPP will call a general meeting within 21 days. Shareholders are advised to take no action at this time.

Speaking about the 22 redundancies, Mr Callaghan" said it is a "sad matter" but one which sits alongside recruitment elsewhere in the business.

He said: "The reality is as a business we are not allowed to sell any new products or to new customers in the UK.

"Although we continue to enjoy very healthy renewal rates there is a decline in the back book. If we are not allowed to sell new business, as a result of that volumetric drop, we need fewer people to service that business.

"Until such time when we can drive sales in the UK, and have our conditions removed or softened, very regrettably from time to time we have to look at operations, particularly around services and claims.

"For us to put the business in the best possible shape we do have to be mindful of head count. That's why we are proposing around 22 role reductions in the operations function in York.

We are looking to redeploy those roles where possible.

"It's not all cuts, we are very much recruiting here in Holgate. We have recruited a phenomenal number of roles in marketing, technology and IT, and quality. We have new products that will bring life back into the company and bring growth."