Former Business Post FD squares up to critics
'Loss of confidence' in the restructured group's ability to meet revenue targets emerged after MD was ousted, Ben Griffiths reports.
The former finance director of parcel delivery group Business Post has hit back at criticism that he issued over-optimistic statements that led to a profits warning.
Chartered accountant Torquil Montague-Johnstone said he had little choice but to resign in view of recent developments and his ‘loss of confidence’ in the restructured management of the group. His main detractors were executive directors and Business Post founders Peter and Michael Kane.
Montague-Johnstone cashed in his entire shareholding in the group in June, realising #4.1m. On 13 August, it was announced that he would be leaving the group within six months due to ‘differing approaches’.
He appeared to have been sent on ‘gardening leave’ prior to his resignation last week.
Montague-Johnstone said he had sold the shares following the reversal of a minuted commitment on long-term performance incentives made to him and ousted managing director Mick Jones. Following Jones’ departure, Montague-Johnstone said he had lost confidence in the company’s ability to exceed City revenue expectations for 1998/1999. His forecast was prepared on the basis that Jones would remain MD for the following 12 months.
At a board meeting on 12 August, Montague-Johnstone said he was unable to support the proposed restructuring of the directors’ responsibilities which would see the Kane brothers, who control 64% of the shares, restored to executive responsibilities. He also said he was concerned about a number of other corporate governance deficiencies at Business Post. The group refused to comment on the statement.
Principal among these was that, for several months, there had been only one independent non-executive director, and Peter Kane was in a position to exercise too much influence as the controlling shareholder, said Montague-Johnstone.
Criticising corporate governance arrangements at Business Post, he said: ‘Had I been allowed to exercise my fiduciary responsibilities, the company would have been prevented from making the mistake of effectively reconfirming market expectations that were no longer appropriate.’