The chairman and chief executive of Australian investment group Babcock & Brown, which holds a 23% stake in Forth Ports, both quit yesterday amid the group's continuing financial troubles.

The chairman and chief executive of Australian investment group Babcock & Brown, which holds a 23% stake in Forth Ports, both quit yesterday amid the group's continuing financial troubles.

Long-serving chief executive Phil Green and chairman James Babcock, who founded the company in 1977, have stepped aside from their roles at the troubled asset management and advisory company.

The current chief financial officer Michael Larkin will replace Green with immediate effect and deputy chairman Elizabeth Nosworthy has been elected chairman.

The management overhaul is an attempt to address a crisis of confidence in Babcock & Brown's leadership following a last-minute profit warning and writedowns last week, and a long-running slump in its share price, which triggered discussions with banks over its debt.

In a bid to improve governance, two other executive directors will also be replaced by directors independent from the management process, and the remuneration system, which rewards management for earning large origination fees, will be reviewed.

Babcock's European Infrastructure Fund announced in January that it had taken a 20.4% stake in Forth Ports, the UK's last surviving independent quoted ports operator. In June, the fund lifted its stake above 23%, after a fall in the share price, at the same time as it was tieing up the deal to buy Angel Trains from Royal Bank of Scotland for £3.6bn.