While Andrew Scott, the chief executive of troubled shopping centre owner Centro Properties Group, has resigned and will be replaced by the head of the group's United States business, what about the board and especially chairman, Brian Healey?
The new CEO of Centro Properties is Glenn Rufrano and his appointment is effective immediately after Andrew Scott resigned on Tuesday, Centro said in the statement. Rufrano is from the US business acquired last year, the acquisition and financing of which has caused much of the pressures on the Centro group.
But if Centro is to have any chance of surviving the current crisis in anything approaching its current form, the departure of Mr Scott will not be enough.
The board, led by Chairman Healey, will have to be restructured dramatically to help regain the confidence of lenders and big shareholders who hold the key to the company's future.
When the AMP got into trouble in the late 1990s and again in the early years of this decade, not only did the CEOs go (George Trumbull and Paul Batchelor) and were replaced, but the chairman, respectively Ian Burgess and Stan Wallis, also departed along with other directors.
The replacements for Wallis/Batchelor were Peter Wilcox and Andrew Mohl who eventually stabilised and then rebuilt the AMP's corporate structure and culture (although there have been problems in disclosing commissions and handling customer complaints).
When Burgess and Trumbull departed, four other directors left the board as well. That didn't work and the AMP ran into trouble a couple of years later with poor decisions and got caught up in the crash of the UK stockmarket.That brought about the departure of Walls/Batchelor and a couple of other directors.
And, when the National Australia Bank ran into trouble in 2004 with unauthorised forex option dealings and $360 million in losses, the CEO, Frank Cicutto, chairman, Graeme Kraehe other directors left the board in a major shake-up. The same happened at Westpac in the early 1990s when the bank all but collapsed after the property crash of the late 1980s.
Company defining events such as that being experienced by Centro at the moment mean substantial changes have to be made at the top of the company.
As the driving force behind Centro's structure and growth path, Mr Scott's departure has been accepted in the market now for a week or so.
That he will be paid $3 million or so on departure is not important. It's not as much as the $13 million paid to Mr Trumbull for his failure at the AMP, and Mr Cicutto at the NAB was paid more as well for failing.
What's important is that he goes, along with others on the board who signed off and approved his now failed strategy, especially the expansion in the US early last year which brought Centro undone.
The news of Scott's departure was revealed in a long awaited statement from Centro Properties yesterday to the ASX. The shares had been suspended last Friday as some lenders queried the company and their security over certain assets
The news didn't mollify nervy investors who sold off the company's shares by around 30%, or 26c down to 60c. They hit a low of 44.5c as investors realised there could be more money to repay in the next few months than previously disclosed.
Centro Properties (CNP) investors were worried by suggestions in another ASX statement by the company that its short term liabilities may be more than previously thought.
"Centro has initiated a review of its classification of current versus non current liabilities in its audited 30 June 2007 accounts, as it now considers there is a prospect that the proportion of current liabilities may have been higher than that reported. The total amount of reported debt of $3,604 million is unaffected," the company said in this release.
No figure was given.
Centro Retail Trust, the linked shopping mall operator, also revealed in a statement to the ASX that it still owed $1.2 billion that was due on February 15, but it also revealed debt owed by December 2008 had almost doubled from $700 million to $1.3 billion.
That news saw Centro Retail (CER) securities plunge by more than a third, 26c to 32.5c, the day's low, after the trading halt was lifted when the statement was issued.
Centro Properties also said it was hopeful its lenders will extend the refinancing period for $1.3 billion of maturing debt it has had trouble rolling over beyond February 15, but didn't offer the market anything concrete which was another hit to confidence is left in the company and its board.
It added that there had been "extensive" interest in its business from investors since announcing a strategic review.
Australia's second largest shopping centre owner has been looking at potential buyers for the company or its assets to help refinance its debt by February 15, after it was hurt by tighter conditions in credit markets following the US sub-prime mortgage crisis.
Centro says it is still in regular "dialogue" with its lenders and that these talks were expected to continue, with a possible extension to the refinancing date.
"Centro is pleased to advise that the lenders are currently considering the arrangements under the extension deed beyond 15 February 2008," Centro said.
"The US lenders are also considering an extension of their current maturities beyond 15 February 2008."
The company previously refused to guarantee its solvency beyond February 15 and offered no assurances yesterday. I its fate and that of the retail arm remain in the hands of US creditors, who it says "are also considering an extension of their current maturities beyond 15 February 2008''.
The company said that another group of US noteholders, owed $US450 million, and had said the company had tech
