08 Feb Taxi group in turmoil as CEO follows chair out the door over land swap deal
Source: Sydney Morning Herald
By: Anne Hyland
Turmoil has engulfed the board of national taxi group, A2B, with its chairman and chief executive quitting in the same week, following a shareholder backlash over a controversial property deal with a wealthy Sydney family.
Andrew Skelton, chief executive of A2B, announced he was stepping down effectively immediately. On Monday, A2B’s chairman Paul Oneile also quit, announcing his retirement.
Mr Oneile was replaced as chairman by independent director David Grant, who said the company would start a search for a new CEO, and that the board had appointed external advisers to commence a strategic review of the business and the company’s asset portfolio.
“In the context of the board’s decision to conduct a strategic review of the business it was best for both the company and Andrew that he pursue other opportunities,” Mr Grant said.
A2B operates nationally with brands such as 13cabs and Silver Service.
The Sydney Morning Herald and The Age reported last week that A2B had entered into a memorandum of understanding with the property development company Addenbrooke, owned by Sydney’s wealthy O’Neil family, in which the two would undertake a controversial land swap deal.
The land swap transaction, which was set to be finalised in May, had drawn the ire of some of A2B’s biggest shareholders, Sandon Capital and Investors Mutual, who wanted the MoU with Addenbrooke abandoned.
In a letter sent to A2B’s board and management in January, Sandon Capital founder and chief investment officer Gabriel Radzyminski said the proposed land swap transaction created a tax liability for A2B. As well, he argued that the company had not disclosed whether it went through a competitive process in its decision to dispose of the land. He also said that A2B had “materially under-reported the value of its property assets for some time”.
A2B intended to swap an 8489 square metre unimproved site it owns in Alexandria, a suburb 4 kilometres from Sydney’s CBD, with land owned by Addenbrooke that is 2440 square metre in size. Addenbrooke’s property shares a boundary with A2B’s site.
A2B’s site is a five-minute walk from Green Square, which has been one of the country’s biggest urban renewal projects in the past decade, where a train station, supermarkets and cafes have been developed in recent years alongside thousands of apartments in an area that used to be mostly commercial and industrial.
A2B said the value of its property was $57 million but a NSW government valuation said the land was worth $71 million. An independent valuation by JLL, commissioned by one of A2B’s shareholders Sandon Capital, said the A2B site was worth $77.4 million.
A2B intended to exchange its property for Addenbrooke’s — the latter’s land is estimated to be worth around $20 million by the NSW government. As part of the swap transaction, Addenbrooke would build A2B a nine-storey office complex, with a lettable area of 9634 square metre that A2B would own as part of the deal. The taxi group said the value of the new property and office building it would own would be $135 million.
Addenbrooke has not disclosed its development plans for the 8489 sq/m site it would gain in the deal.
Now, the property deal will be part of the strategic review being undertaken at A2B.
Mr Skelton had been chief executive since 2014 and had previously been the company’s group corporate counsel and company secretary. In November, at A2B’s annual general meeting, 42 per cent of shareholders voted against performance rights to be granted to Mr Skelton. While 42 per cent also voted against the re-election of Mr Oneile. Half of A2B’s shareholders voted against the adoption of the company’s remuneration report.
Investors Mutual, which owns just under 13 per cent of A2B, had clashed with Mr Oneile and Mr Skelton. Anton Tagliaferro, Investors Mutual founder, had expressed his concern to the board with the way the company had been managed and its strategy, which resulted in some “heated” discussions.
However, A2B’s shareholders concerns escalated after the proposed land swap with Addenbrooke was revealed.
Addenbrooke is a well-regarded and savvy property developer. The private company was founded three decades ago by patriarch Denis O’Neil, who won the 1968 Sydney to Hobart yacht race and competed in Olympic sailing events in Munich and Montreal. Addenbrooke has developed many prominent projects across the city and interstate.
Denis O’Neil had originally founded Hymix concrete which was later sold to Pioneer. Addenbrooke, whose projects include residential, commercial, hotel and marina developments, is run by O’Neil’s three sons, Ned, Jake and Toby.
In 2018, the very private Ned O’Neil featured in the social pages for his lavish three-day wedding held at Hamilton Island’s qualia resort, where he married Deborah Symond, the daughter of Aussie Homes Loan founder and rich lister John Symond.
A2B will release its half-year results on February 25. Mr Grant warned of continued challenging conditions for the company. “Early in the fourth quarter last year, we had hoped that the impact of COVID was waning. The Omicron variant that emerged late in calendar 2021 has significantly extended the period of limitations on mobility.”
A2B shares were last trading at $1.16.
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