Shareholder revolt nears climax as patsystems' losses widen
26 March 2002 | 1495 views | 0
Patsystems shareholders are to vote today on a motion by disgruntled former president Thomas Theys aimed at ousting current CEO David Jones and non-executive director Stewart Douglas-Mann. The move comes as the UK-based derivatives software house unveils a fourth quarter loss of £6.5 million, more than double the Q4 2000 loss of £2.92 million, after writing off unprofitable contracts.
Patsystems' loss before tax for the year to 31 december 2001 rose to £15.2 million, against £9.2 million for the previous period. The current management team are blaming failures in previous management and boardroom wrangles for the company's failure to take advantage of soaring derivatives volumes and the move away from floor-based to screen trading systems.
David Jones was brought in to replace Jacques de Cock six months ago during a management clear-out which also saw the departure of president Thomas Theys. The former Patsystems president, who owns about 14% of the company, is now leading a revolt to replace Jones with his own appointment Gary Brecka, whose background remains obscure. Theys is supported by Paul Heyward, another ex-employee with 3.4% of the company. They have also nominated Joe Solari, the one-time head of US-based network equipment outfit Cabletron Systems, as a board-level replacement for non-exec Douglas-Mann.
Jones, who has the support of major City shareholders, says the vote is "an unwelcome distraction and is currently causing disruption to the business". He anticipates "substantial costs relating to the management of this issue".