Philip Lynch ousted at One51 as investors shoulder €100m losses
Published 02/07/2011 | 05:00
PHILIP Lynch has been ousted as chief executive of One51 after the board terminated his contract last night.
The board of the investment company informed Mr Lynch of his removal yesterday.
Chief financial officer Alan Walsh has been appointed interim chief executive. Executive director Michael Long will be his deputy while the company searches for a successor.
In a statement, the investment company, which has interests in a host of companies including Irish Continental Group, Irish Pride and NTR, said it had been "considering succession for some time" and paid tribute to Mr Lynch for "his significant contribution to the development of the company." Mr Lynch however, said he was "disappointed" at the board's decision on what he described as a "very difficult day for me personally".
Talks between Mr Lynch, who had been chief since 2005, and the company aimed at an amicable break-up are thought to have been ongoing for a number of weeks, but last night Mr Lynch made it clear he had been forced out. His contract ran until 2014. While he did not receive a parachute payment upon leaving, it is believed the company will honour their obligations under the contract.
"When it became apparent that the board wished to invoke the termination provisions of my contract, I endeavoured to reach an amicable resolution with it whereby a smooth transition to a new chief executive could be achieved in the interests of the company and its shareholders," Mr Lynch said.
His ousting comes only three weeks after the company approved his strategic plan for the company over the next three years. One51 secured €200m in refinancing last month.
The company, which was spun out of the Irish Agricultural Wholesale Society (IAWS), has struggled in recent years, with its share price falling from €5 in 2007 to only 90c today.
The move comes almost a year after Mr Lynch saw off a challenge to his position by disgruntled shareholder Gerry Killen who led the 'Campaign for Change at One51', culminating in a controversial annual general meeting last summer.
The company has yet to publish its annual results for 2010 or set a date for its AGM.
Despite those troubles, Mr Lynch described the company as being in "great shape" and added that the share price, which is traded on the Grey Market, "does not reflect this value".
"While I have invested heavily in the company myself, I feel a huge responsibility to the shareholders whose faith in me led to their investing.
"I would have liked the time to deliver this value to our shareholders [and] it is a source of great regret to me not to be given that opportunity in the best interest of the company."
Mr Lynch went on to accuse what he called a "divisive and personalised campaign" against him of leaving the company in a "vulnerable" position.
"This campaign has served to destabilise the company and erode further its perceived value," he added.
A host of top businessmen and major co-ops are sitting on multi-million investment losses as a result of the collapse of the One51 share price. Ireland and Britain's biggest dairy co-ops have seen more than €100m wiped off the value of their shares since they first traded in 2007.
The Kerry Group is shouldering the biggest investment losses, with the value of its shares down by more than €40m while co-ops and marts have also sustained huge losses on the shares.
Beef baron Larry Goodman has seen almost €9m wiped off the value of his stake; former Esat Telecom chief executive Barry Maloney's shares lost €1m in value; embattled property developer Bernard McNamara's shares are down €800,000 in value; and disgraced former Irish Nationwide Building Society boss Michael Fingleton's stake has fallen by almost €300,000; while top golfer Padraig Harrington's shares are down by €80,000 in value.