LEGAL proceedings have been launched against the founder of York credit card insurer CPP as the company's board seeks an injunction from the High Court.

Holgate-based CPP has applied for an injunction to prevent the company's founder and former chairman Hamish Ogston from voting in a motion to replaced four senior directors on the board.

As the majority shareholder in CPP, owning 42 per cent of shares, multi-millionaire Mr Ogston is working with Schroder Investment Management, which represents shareholders owning 10 per cent of the company, to oust current CPP chief executive Stephen Callaghan and chairman Roger Canham along with non-executive directors Shaun Astley-Stone and Abhai Rajguru.

CPP believes the move contravenes a legal agreement between Mr Ogston and the company, which was agreed when he stepped down as a director in 2013, and outlined a promise on Mr Ogston's part not to do anything that would damage CPP.

The current board argues the proposed director replacements are "not in the best interests of the company or of CPP shareholders as a whole" as they put at risk relationships with the FCA, with which CPP is currently working in order to lift restrictions imposed after it was found guilty of miss-selling services in 2013.

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

CPP has turned to the High Court in bid to prevent Mr Ogston from voting in the forthcoming general meeting on May 5, when shareholders will decided whether or not to accept the proposals to instate Sir Richard Douglas Lapthorne, Nicholas Ian Cooper and Mark William Hamlin onto the board in the place of current directors.

A group of staff at CPP, which employs 550 people in York, have independently stepped forward to back the current board with a petition featuring more than 200 signatures.

They praised the current management team, which was brought in last year, for the turnaround of the company and achieving profitability as the firm recovers from a £10.5 million fine for miss-selling, which has left it unable to sell in the UK while paying out £65.8 million in compensation.

Last month saw CPP report profits of £20.8 million, having posted losses of almost £7 million the year before.

Reporting the financial results for the year ending December 31, 2015, CPP bosses said a return to the black reflected a new beginning for the firm as it continues its turnaround.

In a circular issued to shareholders last week urging them the vote against the proposals on May 5, CPP chairman Roger Canham said: "The board has a clear and established strategy to grow the Group’s business by developing and marketing new products in its core markets including the UK. This will require reinstatement of CPP’s full regulatory permissions.

"Progress is likely to be impacted if the company and its management, as a result of the appointment of the requisition candidates, are unable to create the conditions in the company’s business necessary to maintain positive momentum with the FCA and achieve reinstatement of CPP’s regulatory permissions.

"The potential disruption to the Group’s recovery and growth arising from an inability to properly implement the Group’s strategy would have an adverse impact on the morale of management and key employees."