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Clash over CE's style causes Mega top-line rupture
Management team cite differences over company direction and the CE's manner, writes THABO KOBOKOANE
THE management style of Johnnic CE Paul Edwards and a clash over strategic direction for the group have emerged as the reasons behind the resignation of top management at Millennium Entertainment Group Africa (Mega) this week.
Mega CE Dennis Cuzen and executive directors Alan Cherry (Gallo), Geoff Engel (entertainment, retail and publishing) and Sid Morris (Nu Metro) resigned after apparently citing differences with the new strategic direction spearheaded by Edwards, and because of his management style.
It is not clear whether the four were paid any packages.
"After considering all the options we felt we no longer wanted to be part of the group and resigned," says Cuzen.
The four will remain with Mega until March 31, when Mega will use them as consultants for a "specified period", believed to be almost a year.
After leaving Mega, Cuzen says the four will pursue their own business interests with their new company, The Next Step, which had just been formed in "anticipation of this turn of events".
The Next Step will focus on music, video, film, books and related areas.
"We collectively have over 60 years of experience in this area and hope to harness and utilise that," says Cuzen.
What should have been a public relations exercise to announce the amicable departure of the four turned sour with Cuzen complaining about the release of an e-mail to staff from Edwards which was different from an agreed press release.
The internal e-mail detailed Johnnic's plans for Mega and Omni Media in the same statement that announced the departure of the four. The restructuring plans were not in the "agreed" press release.
Edward notes in his e-mail that since the delisting of Mega last year the need for a Mega group structure has fallen away.
"Consequently, it is our intention to absorb Mega into Omni, which will then become the operational group that controls TML, Gallo, Nu Metro and our retail and publishing businesses.
"As a result of the re-organisation it will be possible to rationalise some of the back-office functions of the Omni group companies and it is expected that considerable savings will result," says Edwards.
Analysts say the restructuring of Mega would have led to a loss of influence for the four, in particular Cuzen, who has been at the helm of Mega for seven years, but with the group for 19 years.
Johnnic executive director Paul Jenkins says the e-mail was not meant for publication in the media, but was an internal communiqué.
"It complimented the contribution of the four, but it referred to some aspects of the Mega reorganisation that it was felt necessary to address with staff," he said.
"I can understand the sensitivity of the exiting management team. I would not expect our internal communiqué to be printed in newspapers."
Meanwhile, both Caxton and CTP, in which Johnnic holds about 40%, on Friday issued joint cautionaries stating that there are matters under discussion, which they did not detail.
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