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Telecom Italia kicks out CEO Amos Genish

Amos Genish

In one of the least surprising board room purges ever, Telecom Italia (or TIM for short) has got rid of its CEO Amos Genish.

“TIM’s Board of Directors met today and deliberated by a majority vote to revoke with immediate effect all powers conferred to Director Amos Genish, giving mandate to the Chairman to resolve further obligations in relation to the existing working relationship with Genish,” said a TIM announcement today.

“In accordance with the succession plan for Executive Directors adopted by TIM, the proxies revoked to Director Amos Genish were provisionally assigned to the Chairman of the Board. The Chairman of the Nomination and Remuneration Committee has called for a meeting of the latter, in compliance with its responsibility in identifying the new CEO.

“A new meeting of the Board of Directors to appoint a new CEO was convened for November 18. The Board of Directors thanks Amos Genish for the work done in the interest of the Company and all its stakeholders in these fourteen months of intense activity.”

The removal of Genish had seemed inevitable since investor group Elliott won a battle with French conglomerate Vivendi, for control of the TIM board room, back in May of this year. Genish had previously been installed as CEO while Vivendi was still calling the shots, but after winning control Elliott made all the right noises about Genish having their full confidence.

This always seemed somewhat tenuous, with Genish’s loyalties presumably under suspicion and him providing at the very least a convenient scapegoat as and when things took a bad turn at the company. That came to pass last week when TIM said it was writing down the value of its assets by €2 billion and exacerbated by a disagreement between Genish and the board over what to do about TIM’s fixed line network.

Rumours emerged early this week that Genish’s days were numbered and that the board was about to convene a special meeting to agree on his demise. Hilariously TIM issued statements to the press denying such a thing was going to happen just a day or two before it did. TIM has a rich history of deceptive press communications but this outright lie was shameless even by its standards.

“This is a shock,” Analyst Paolo Pescatore of Midia Research told Telecoms.com. “However, ongoing turmoil at the company continues to drag it down. The company is very well placed given its assets and early move to secure a leadership position in 5G. Further tussles will hand its fierce rivals a competitive edge.”

So what next? Elliott apparently has less than a week to come up with an alternative CEO that will do its bidding and the remaining Vivendi board members will presumably oppose whoever they put forward. Above everything else, however, this is another opportunity to finally appoint a CEO whose first name is Tim. Surely everyone can agree on the importance of that.

 

UPDATE – 13:30, 13/11/18: Inevitably this has escalated quickly, with Vivendi apparently accusing Elliott of cooking the books and Elliot responding via TIM with the press release below.

TIM: CLARIFICATIONS ON THE STATEMENTS MADE BY SHAREHOLDER VIVENDI AND ON CONSEQUENT PRESS REPORTS

Rome, 13 November 2018

With reference to the statements issued by shareholder Vivendi on 8 November 2018 (through spokespersons) and on 5 September 2018 (issuing an explicit press release), as well as to the article by Yves de Kerdrel published on 9 November 2018 on www.WanSquare.com with the headline “Elliott manipule maintenant les comptes de Telecom Italia” (“Now Elliott is manipulating Telecom Italia’s books”), TIM provides the following clarifications:

  1. TIM’s Board of Directors currently in office

- was appointed to replace a Board that had collapsed due to the voluntary resignations of the Vivendi appointed Directors, who resigned to avoid the revocation of some of them, as requested due to serious governance shortcomings;

- wholly consists of Directors that are independent from the investment funds managed by Elliott;

- confirmed CEO Amos Genish (appointed by Vivendi), who agreed to remain in office provided the approval of the Strategic Plan deliberated by the previous Board of Directors acting under the direction and coordination of Vivendi and consisting of a majority of Directors appointed by the latter (and this indeed happened).

  1. Consequently, Chief Executive Officer Amos Genish continued his work in a seamless transition from the past, pursuing the objectives set out in the Strategic Plan he himself had drawn up in coordination with shareholder Vivendi, without achieving them and therefore obliging the current Board to make the write-downs reported in the interim report on operations as at 30 September 2018.
  2. Therefore, the need to proceed with these write-downs is not attributable to disorganisation on the part of the Company or to failures in the new governance, as Vivendi insinuated, but to measures implemented by Amos Genish (appointed by shareholder Vivendi) that can be drawn back to strategic choices made by shareholder Vivendi.
  3. As for Vivendi’s statement that it “deplores” the decision to not call a shareholders’ meeting to renew the external auditors, it should be noted that this statement is untruthful (since the BoD has not yet made any decision on this point) and misleading (given that no law requires the external auditors to be appointed before the shareholders’ meeting that will be called to approve the financial statements as at 31 December 2018).

TIM therefore warns shareholder Vivendi, WanSquare and Mr. Yes de Kerdrel to cease making further false and misleading announcements whose only effect is to damage the Company and all its shareholders, and reserves the right to take further action if necessary.


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