David Montgomery, the exec-utive chairman of Mecom, has defeated an attempt to oust him by fellow directors, prompting the resignation en masse of six members of the publishing group's board yesterday.
Sir Robin Miller, Mecom's senior non-executive director and the former chief executive of the publishing group Emap, is thought to have teamed up with John Allwood, the finance director, to try to force out Mr Montgomery.
Sir Robin met shareholders, who include a string of City institutions, to persuade them to back the revolt, but they rebuffed him and instead backed Mr Montgomery, who stepped down as chairman yesterday but remains Mecom's chief executive.
As a result, Sir Robin and Mr Allwood resigned yesterday, along with four other non-executives: Richard North, Jan Houwert, John McNeil and Robert Pieterse.
The directors said they had growing concerns regarding the stewardship of the group, including "its strategic direction, the effectiveness of executive management and the accountability of the chairman and the chief executive to the board".
Mr North said a key problem with the company's strategic direction was the continued investment in its online strategy at a time when the current economic downturn warranted "a total focus on cash generation".
Mr North said: "Each of us reached our decision independently. There have been no personal agendas – no one has angled to become chairman, indeed quite the reverse."
He declined to comment on his specific gripes with Mr Montgomery, but said: "It was a whole series of issues." He also declined to say if the non-executives had held discussions with its lending banks, although he added: "The debt levels were not the issue."
However, market sources said that Mr Montgomery wanted some board members to take a more robust position in discussions with banks, as well as taking a more assertive line on the disposal of assets.
Sources said his stance was partly supported by Mecom successfully selling its German titles, including Berliner Zeitung, to M DuMont Schauberg for €152m (£137m) last week. In December, Mecom negotiated a post-ponement of a banking covenant test, due to New Year's Eve, until 28 February.
Mr Montgomery said: "Following the recent sale of our German titles we will continue to strengthen Mecom's balance sheet and market position. We are confident that the strategy of reducing debt and focusing on the group's core assets will greatly improve the prospects of the group and the returns we can provide to shareholders."
After the non-executive resignations, Alasdair Locke, the only non-executive who stayed on, has become chairman.
Henry Davies, the group's financial controller, has become acting finance director until the search for a new finance director has been completed. Keith Allen remains on the board as an executive director. Stephen Davids, the current chairman of Datatec and Digital Marketing, has joined the board as the senior independent director.
Mecom owns more than 300 media titles and has substantial operations in the Netherlands, Denmark, Norway, Germany and Poland.Reuse content