Michael Fredericks, the CEO and Founder of Australia's OnTheHouse (ASX:OTH) has resigned. The resignation comes amidst controversy arising from a civil legal matter in which orders were made against Mr Fredericks. According to AAP, the civil legal matter relates to Mr Fredericks failing to hand over financial documents relating to a private trust.
In an interview with AAP, it was reported that "the civil action never alleged impropriety and was not linked to his role as the head of Onthehouse, but media attention and the board's reaction led to his resignation."
Mr Fredericks also give a parting shot to the OnTheHouse Board. In the AAP interview he said "It was very disappointing. I felt it would have been better for the board to have been supportive of me while the matter was being addressed. There's a lot that goes into building a company from scratch to a company of about 150 people and churning over $26 million a year."
Mr Fredericks is the biggest shareholder with an 8.6 per cent stake.
The company released a statement on Wednesday saying its investigation had found the dispute was a private civil matter not linked to Onthehouse, however it said Mr Fredericks' had agreed it was time for a new chief executive to drive future growth.
Here is the announcement from the OTH Board:
On behalf of the Board of Onthehouse Holdings Limited (ASX: OTH), the Chair, Ms Gail Pemberton, today announced that the independent Board investigation into the civil matter concerning Mr Michael Fredericks had been completed (ASX announcement 23 September 2014).
The investigation concluded that the matter was a private civil legal case that had no impact on the financial performance or operations of Onthehouse. The matter arose from Mr Fredericks acting as trustee of a trust, separate to Onthehouse Holdings Limited, and not in Mr Fredericks’ position as CEO or Managing Director of Onthehouse Holdings Limited. The Board did acknowledge that the matter had caused unnecessary distraction and publicity in relation to the Company.
Notwithstanding the outcome of the investigation, Michael Fredericks has tendered notice of his resignation today. The Board will commence a search for a new CEO immediately. Gail Pemberton will continue to oversee the Company’s operations until the week commencing 13 October 2014, when Mr Anthony (Tony) Scotton, currently a Non-Executive Director of the Company, returns from overseas and will step into the role of interim CEO.
Tony is a highly competent and experienced CEO and Director with a long track record of driving performance in growth businesses. He was most recently CEO and Director of SAI Global Limited, where he oversaw a significant transformation of SAI Global from a government-owned publishing and compliance business to the global online, technology and services organisation that SAI Global is today. Tony also has strong business restructuring experience having overseen multiple acquisitions and business integrations with SAI and Pacifica.
The Board wishes to thank Michael for his dedication and leadership in building the Company since its listing in 2011. The founder of the Consumer Online business, Michael drove the strategy and vision that saw the acquisition of the real estate software businesses, Console and Portplus, the property data and AVM business, Residex, as well as the Real Estate Advertising Network (REAN).
In concluding, Ms Pemberton reiterated that despite the distractions of the past week, the Onthehouse team remain incredibly focused on the Company’s operations. “The team are working hard at building deeper relationships with our Banking clients, increasing the yield from our Real Estate Agency customers and delivering on our key strategic initiatives, namely the new consumer portal and the build out of our Data Platform, which are progressing well and according to expectations. Additionally, with the recent appointment of Brian Mitchell, the Onthehouse Board’s depth of digital, data and software skills has been enhanced and aligns well with the three core business pillars.”