The board of Alliance Boots faced public criticism from John Watson, chairman of the health and beauty group’s pension fund trustees, this morning for failing to protect the interests of pensioners ahead of an £11 billion takeover by American private equity firm KKR.

Mr Watson led a barrage of complaints from angry and disgruntled pensioners at an emotionally-charged shareholder meeting to approve the takeover held in the wood-panelled offices of Goldman Sachs in London this morning.

“I am very disappointed and regret that the board chose to recommend this proposed acquistion without ensuring clear plans had been agreed for the future funding in the scheme and arrangements made to protect pensioners,” Mr Watson told Alliance Boots’ nine-member board, who were squeezed behind a long table facing about 50 independent investors.

The white-haired trustee dressed in a grey suit and striped tie addressed the meeting calmly and with great authority. He said the £8 billion of borrowings required to finance KKR’s bid for Alliance Boots had “serious implications” for the pensioners in the scheme particularly since no agreement had been reached despite several meetings with the takeover consortium.

Mr Watson called on Sir Nigel Rudd, Alliance Boots’s chairman, to use his “remaining influence to give the scheme and its members the future they deserve,” before KKR and their bidding partner Stefano Pessina, Alliance Boots’ deputy chairman, formally take control of the business, expected on June 26. The deal still requires approval by the EU competition authorities.

Mr Watson’s comments were supported by the vice chairman of the Boots’ Pharmacists Association who said he was “very concerned about staff who have devoted their life to Boots the Chemist,” and what might happen once the takeover deal had been agreed.

Sir Nigel, looking surprised at the strength of Mr Watson’s criticisms, insisted that the position of pensioners and staff had been “taken into account” but that shareholder’s interests were “pre-eminent” under English law.

He defended the board’s decision to agree a deal with KKR, and said that Boots pension fund was “probably one of the best funded in the FTSE”.

“We have had assurances from KKR and Stefano Pessina that (situation) will continue,” he said.

He said that Boots board would be “pressing for agreement” between the trustees and the takeover group over the next two or three weeks and told pensioners they should feel “secure” about the future of the scheme because the Pensions Regulator would step in to protect their interests if no agreement could be reached.

However it is understood that the regulator will not intervene untill 15 months after the takeover is finalised.

Martin Simons, an independent shareholder who said he had held Boots stock for 35 years said he was wearing a “purple tie in mourning” for the handover of the firm into private equity hands.

In an emotional speech which drew applause from fellow independent shareholders, he said: “I think this firm has been taken in by the executive deputy chairman who knows much more about this business than private shareholders and institutions. I have a nasty feeling that his deal was planned long long ago.”

Mr Simons said the deal was "deplorable" and accused the board and institutiuonal shareholders of acting in their own self-interest.

"This is a great company that is going to be sold and the institutional shareholders don't care as long as they get their bonuses," he stormed. "I think this deal does not bring credit on the City of London... There are people in a privileged position who have taken advantage of general shareholders."

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