As the war of words hotted up between the board of investment banking group Corpcapital and former director Nic Frangos over the circumstances surrounding the latter’s resignation, Frangos said on Monday night he would give his “fullest cooperation” to any independent third-party inquiry called by shareholders.
In a statement, Frangos said the two versions given by both sides on the reasons for his resignation were “poles apart” on a number of issues, and both could not be true. He said Corpcapital shareholders were entitled to establish the facts for themselves.
“I will give my fullest co-operation to any independent third-party inquiry called by shareholders,” he added.
Corpcapital’s board came under heavy attack from former director Nick
Frangos at the weekend when he took the unusual step of releasing his resignation letter, replete with allegations of serious corporate governance problems.
Frangos, a founding shareholder, resigned as nonexecutive director in December, saying he was unable to carry out his fiduciary duties. The release of the letter is the first time the issues at the heart of his resignation were made public.
In the letter, Frangos launched a stinging attack on certain Corpcapital executives for their alleged lack of disclosure on key issues, serious corporate governance concerns and the hefty pay packages allegedly given to senior management.
The board responded Sunday night, stating it was “outraged” by Frangos’ actions and claimed his letter was “mostly untrue”. The company also said Frangos did not leave voluntarily, but was asked to resign.
Corpcapital director Neil Lazarus said Frangos was now trying to justify his departure “under the pretext of being a champion of corporate governance”.
Frangos retorted that a director could be fired only by the shareholders, making it “irrelevant” whether Corpcapital management asked him to leave.
Frangos said he released the letter in the interest of “doing what was right for shareholders” after Corpcapital failed to provide them with a full explanation for his departure at its annual general meeting last week. The letter contained serious allegations, but Frangos said he has extensive documentation to back up his claims. Frangos chaired Corpcapital’s remuneration committee.
In his letter, he described a meeting on executive remuneration for the year ending August 31, at which, he said, he and nonexecutive director Wim Trengove favoured full disclosure to shareholders.
He accused management of awarding itself hefty bonuses, pushing for extra share allotments and using strong-arm tactics to get the board to approve a cash distribution to shareholders under a share-option scheme. Frangos also claimed that the true valuation of Corpcapital subsidiary Cytech was not properly disclosed to shareholders. He said he was also surprised to learn that R37-million had been paid in restraint of trade agreements to management, allegedly without this information being disclosed to the board or the committee.
Corpcapital vehemently denied this on Sunday. “No restraint of trade payments were made to any employees or executive directors who were already in the employ of the group. The overwhelming majority of restraint payments was made to employees who were not directors.”
According to Business Day, Frangos also accused CEO Jeff Liebesman of lying to an Old Mutual analyst when he was quizzed on details of his 2002 remuneration package. “(His) reply contained misrepresentations and departures from the facts.”
Corpcapital’s share price ended Monday 2,05% or three cents lower on Monday at 143 cents per share. – I-Net Bridge