Chrysalis (CHRY) has denied its fund managers’ claim that dismissing them will endanger its biggest holding in Starling bank.

On Friday, in an angry response to the investment company serving notice on them, fund managers Richard Watts and Nick Williamson said the move risked the fund’s recently acquired seat on the board of Starling, a rapidly growing challenger bank that accounts for over half of Chrysalis’ assets.

In a second statement on Friday, Chrysalis said that its governance and representation rights at Starling were governed by a shareholder agreement and that the termination of Watts and Williamson’s contract would not alter its contractual board observer and other rights.

Watts was appointed one of Starling’s 11 directors in December. Chrysalis noted the company had successfully managed its investment in the bank without a board seat from 2018 until the end of last year.

“Having taken legal advice, the board does not consider that the proposed changes would result in a loss of oversight over the company’s investment in Starling. Further, it does not consider that an impairment of value would be caused solely by a change in the composition of the Starling board as suggested by the investment adviser,” Chrysalis said.

Attempting to draw a line under the row, the board chaired by Andrew Haining said it did “not intend to comment further on the other statements made by the investment adviser” and expressed confidence in its ability to deliver a managed wind-down and return of capital to shareholders with the help of consultant turned director Sam Dobbyn.

Stay a step ahead. Our daily newsletter brings you the latest on investment trusts and active ETFs. Subscribe here.