Wednesday, 24 June 2015 By Patrick Howard
Former CEO threatens to launch a Federal Court challenge as early as this Friday for unpaid salary and expenses following his shock dismissal in March this year. “They even cut off my phone,” he said from his London home.
After almost two tumultuous years at the helm of the ailing paper merchant in London, Andrew Price is on the outer with the Australian-based company establishment and its chairman, Robert Kaye. He maintains he was dismissed from his post after refusing to resign following a disagreement over a potential $100 million capital raising to restructure the business and pay out the $280 million hybrid shareholders that have long been a thorn in its side. Opposition from one of PaperlinX’s largest shareholders is claimed to have put the kybosh on the ambitious scheme.
About to take up a position in Hong Kong with print management firm HH Global as its CEO for Asia-Pacific, Price claims he got short shift from the company with an abrupt dismissal. He has not received any of the salary, expanses or superannuation owed to him for the months leading his sacking. He says the board marginalised him during the period before he was sacked, refusing even to allow him as CEO to scrutinise payments to consultants or executive expenses.
In a wide-ranging critique of the strategy that has the company in a fire sale situation in Europe, Price identifies a number of decisions that he believes have cost the company dearly. He is especially scathing of the prices the company has received for its international businesses, including the sale of PaperlinX Canada, which he says was sold for “almost half price” against his advice.
Since March this year PaperlinX Europe has imploded with the Benelux, UK and Austrian companies sold out of administration with the Scanindavian, Spanish and Irish companies mostly subject to management buyouts at rock-bottom prices. PaperlinX has not received any material direct benefit from the sales with the proceeds going to other European stakeholders.
The sales are still going ahead with only the German and Czech operations still remaining from the European businesses of the once mighty paper merchant. When completed the company will have effectively exited the Europeans market completely to concentrate on its profitable Australian, New Zealand and Asian operations..
Price believes PaperlinX in Europe was on track to negotiate its way out of a defined pension scheme deficit in the UK and Holland when the board decided to cut the European operations adrift after its shares were suspended from trading. With less than three months to go on his contract when the board moved against him, he maintains agreements in principle were reached with financiers to raise the required capital.
The far-reaching restructure would have seen considerable dilution of the stakes of existing shareholders, a flaw that proved fatal to its fulfillment. The disagreement became personal when Price was dismissed in a manner he describes as being “as brutal as you can get.” Later, an agreement was reached in mediation about his remuneration but then fell apart. He believes he has no other option but to bring the matter to the Federal Court in Australia.
PaperlinX has appointed Andy Preece as its new CEO following the departure of Price with a remit to build the company’s Australia-centric business into a diversified graphic arts supplier. As part of the reorganisation in the past two week the local operation has moved its Scoresby HQ to Dandenong. Print21 sought comment from PaperlinX about the proposed legal challenge but has not received any response at time of publishing.
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See more at: http://print21.com.au/andrew-price-to-sue-paperlinx-over-sacking/87878#sthash.qaUL6h2f.dpuf
SRS Price at posting:
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