RABID DOG SYNDROME SUGGESTED AS STELIOS ATTACKS FASTJET ONCE AGAIN
(Posted 22nd March 2016)
Clearly bolstered by his recent success, when he forced former CEO Ed Winter to leave the company alongside the airline’s general counsel Krista Bates, has Stelios Haji-Ioannou, in short SHI, taken further aim at the company. After several failed attempts at his former airline Easyjet, where in typical fashion he also tried to provoke fight after fight with the current management but was defeated in his attempts to change that airline’s strategic direction, has SHI clearly shifted his focus to Fastjet, where he holds a minority share of 12.6 percent.
Commented a source close to the airline, but for purposes of clarification not from within the airline: ‘Maybe the company should have dug in its heels and held the EGM Stelios had demanded. As I said before, Ed and Krista are fundamentally too decent to have the boardroom erupt in major fights which will take focus away from the challenges in the market places. They stepped aside and avoided the need for an EGM. The net result however now is that the fellow feel validated and has already launched another attack on the company’s direction. This will no doubt distract from the real enemy which is out there, other LCC’s in Africa trying to keep Fastjet out of their skies, regulatory regimes aimed at protecting national carriers and holdups in getting Fastjet Zambia off the ground. This attack shows the rabid nature of Stelios who is the bogeyman for Easyjet’s board and now also for Fastjet’s board‘.
Stelios’s latest attack on Fastjet seem focused on an alleged violation of a brand licence as well as having suggested that the airline may go broke. By the look of it may this well end up in court as indications are that other shareholders are no longer willing to entertain SHI’s shenanigans and have began to question his motives over both timing and direction of his assault on board and company.
As a result did Fastjet’s shares take a further dip by 6.1 percent yesterday, prompting the airline to issue the following statement: ‘Whilst the board welcomes constructive engagement with all shareholders, it cannot understand why easyGroup, acting as either a 12.6 per cent shareholder or brand owner, has published this particular letter without first raising its concerns with the company. The board considers the publication of this letter as wholly inappropriate and is taking legal advice on the matter. The company holds easyGroup responsible for any damage caused to the business by the publication of this letter‘. SHI’s first attack caused the company share price to dive by over 30 percent on the day, destroying shareholder value and forging unity among other shareholders whose assets were diminished by the Stelios broadside.
SHI though proved his cantankerous side was alive and kicking inside him when he launched another broadside, this time at Fastjet Chairman Colin Child. Said another source based in the UK about Stelios additional demands to resume publishing monthly statistics of loadfactors and related data: ‘This is an idiotic request and shows that Stelios is out to harm the company. Given that no other African LCC has ever published such data, did the monthly updates which were issued to the end of 2015, only serve to provide competitors with market intelligence, free information which they could use to react to Fastjet’s market initiatives.
Shareholders get enough information, especially when they behave and act in the interest of the company but Stelios seems hellbent to destroy it. Easyjet executives have asked the question and I do again, what is wrong with that fellow?‘.
It was also confirmed that EasyGroup representative on the Board of Directors of Fastjet, one Tim Ingram, who only joined the board apparently late last year, already resigned his position after doing the dirty work for SHI in launching the scathing attack on Ed Winter and Krista Bates which led to their resignation.
Shareholder going rogue seem to be the biggest threat at present for Fastjet which competitors in Africa no doubt have a field day as the company now has to devote resources and manpower to extinguish the fire lit by SHI instead of having all hands on deck to energetically fight their battles in the market places.