It’s not just high-profile companies such as James Hardie, Bapcor, AMP and Westpac that have recently seen changes in their uppermost rungs of management.
In fact, in terms of management and board ructions, there is little to match what has been happening of late at A2B Australia, whose Chairman and CEO have both departed in the first two days of this week following shareholder unease over a controversial property deal the company struck with a wealthy Sydney family.
A2B operates nationally with taxi brands such as 13cabs and Silver Service and seems to have successfully (on the taxi side of the business) fought back against ride-share businesses like Uber.
In this case, the reason for the problems hasn’t been operational, but rather a controversial Sydney property deal that has upset some shareholders to the point that they actively lobbied to have it overturned.
As a result, A2B’s CEO Andrew Skelton left on Tuesday, a day after chairman Paul Oneile also quit, announcing his retirement. None of the other companies named have seen such a dramatic loss of senior executives in so short a period of time
Mr Oneile was replaced as chairman by independent director David Grant, who said the company would start a search for a new CEO, and that the board had appointed external advisers to commence a strategic review of the business and the company’s asset portfolio. Investment bank Gresham will run the review.
“In the context of the board’s decision to conduct a strategic review of the business it was best for both the company and Andrew that he pursue other opportunities,” Mr Grant said in a statement on Tuesday.
Relations between shareholders and the company – especially the CEO and chair have not been happy for a while.
Mr Skelton became CEO of the company in 2014 and had previously been the company’s group corporate counsel and company secretary. November’s A2B AGM, saw 42% of shareholders vote against him being granted performance rights.
42% also voted against the re-election of Mr Oneile. Half of A2B’s shareholders voted against the adoption of the company’s remuneration report at the meeting.
A2B had entered into a memorandum of understanding (MOU) with the property development company Addenbrooke, owned by Sydney’s wealthy O’Neil family, in which the two would undertake a controversial land swap.
The land swap transaction, which was due to be finalised in May, had drawn opposition from some of A2B’s biggest shareholders, Sandon Capital and Investors Mutual, who want the MoU with Addenbrooke abandoned.
Nine’s Sydney Morning Herald reported last week that “In a letter sent to A2B’s board and management in January, Sandon Capital founder and chief investment officer Gabriel Radzyminski said the proposed land swap transaction created a tax liability for A2B. As well, he argued the company had not disclosed whether it went through a competitive process in its decision to dispose of the land. He also said that A2B had “materially under-reported the value of its property assets for some time”.
“A2B intended to swap an 8489 square metre unimproved site it owns in Alexandria, a suburb 4 kilometres from Sydney’s CBD, with land owned by Addenbrooke that is 2440 square metre in size. Addenbrooke’s property shares a boundary with A2B’s site.
“A2B said the value of its property was $57 million but a NSW government valuation said the land was worth $71 million. An independent valuation by JLL, commissioned by one of A2B’s shareholders Sandon Capital, said the A2B site was worth $77.4 million.
“A2B intended to exchange its property for Addenbrooke’s — the latter’s land is estimated to be worth around $20 million by the NSW government. As part of the swap transaction, Addenbrooke would build A2B a nine-storey office complex, with a lettable area of 9634 square metre that A2B would own as part of the deal. The taxi group said the value of the new property and office building it would own would be $135 million.
“Addenbrooke has not disclosed its development plans for the 8489 sq/m site it would gain in the deal.”
Now, the property deal will be part of the strategic review being undertaken at A2B, which suggests a way will be found for the deal not to proceed.
All in all shareholders loved the changes and the promise of a review and sent the shares up a very solid 12% to $1.30
