HSBC and Rio Tinto chairs get call to replace BT's Rake

The chairmen of HSBC and Rio Tinto (Hanover: CRA1.HA - news) are engaged in a two-horse race to replace Sir Mike Rake at the helm of BT Group (Other OTC: BTGOF - news) 's board as the telecoms group battles to hammer out a deal with Ofcom over the future of its Openreach infrastructure unit.

Sky News has learnt that Douglas Flint, who is due to step down at HSBC later this year, and Jan du Plessis, who has led Rio since 2009, have been identified as the leading candidates to become BT's next chairman.

An appointment is expected to be announced in March, one source said on Friday.

The naming of a successor to Sir Mike, who also chairs Worldpay, will come at an important time for BT, which is attempting to contain the damage caused by an accounting fraud within the Italian operations of its Global Services division.

Sir Mike has served as BT's chairman since 2007, since when its most eye-catching move was a return to the mobile phone market through the £12.5bn takeover of EE.

That deal was spearheaded by Gavin Patterson, BT's chief executive since 2013.

The company's search for a new chairman, which has been under way since the middle of last year, was signalled in its last annual report.

BT has been in negotiations for months with Ofcom, the industry regulator, about a new governance and operating structure at Openreach, and has appointed a group of independent directors to serve on a newly constituted board.

Ofcom has nevertheless decided to pursue a formal process through the European Commission aimed at enforcing legal separation, with BT's rivals - including Sky plc (Frankfurt: 893517 - news) , the owner of Sky News - calling for it to go even further.

Mr Patterson also faces the challenge of dealing with a slowdown in new government and international corporate contracts in BT's Global Services business.

The identities of the two candidates who have been shortlisted to succeed Sir Mike are unlikely to surprise investors, given their status as City grandees.

Mr Flint has spent the latter half of his executive career at HSBC, initially as group finance director before becoming chairman in 2010.

He serves as a British Business Ambassador, and spent six years on the board of BP.

Announcing its full-year results this week, HSBC reiterated that it was on track to announce Mr Flint's successor during the course of this year.

Rio has yet to announce a date for Mr Plessis's departure, but the miner's recent appointment of prominent board members - including Sam Laidlaw, the former boss of Centrica (Amsterdam: CC8.AS - news) - signalled preparations for his retirement.

Mr du Plessis was also chairman of SAB Miller, the brewer acquired by AB InBev (Brussels: ABIT.BR - news) for £79bn last year.

BT declined to comment, while neither HSBC nor Rio Tinto could be reached for comment.