Former Tabcorp CEO Adam Rytenskild heads for court; James Chessell set to swing axe at AFR

Ex-Tabcorp chief executive Adam Rytenskild is suing his former employer. Picture: Chris Pavlich

Five months after a vulgar, offhand (and alleged) remark ended the career of Tabcorp CEO Adam Rytenskild, the betting giant’s former boss is mounting a case that he was railroaded out of the company by an overzealous board that gave him one hour’s notice to quit or face the sack.

Rytenskild has engaged barrister Arthur Moses SC to claw back millions of dollars in lost entitlements forfeited in March during his hastily engineered departure. Rytenskild’s argument is based on a claim of unfair dismissal and a denial of procedural fairness ahead of the case’s first mention in the Fair Work Commission on Wednesday.

For what it’s worth, Moses has a track record of recent successes in similar matters, winning confidential settlements for boned Cranbrook principal Nicholas Sampson and former Northern Territory commissioner Jamie Chalker.

Barrister Arthur Moses SC. Picture: Jeremy Piper

Tabcorp announced Rytenskild’s exit once it revealed that it had engaged external lawyers to investigate an allegedly smutty comment he made about a female regulatory official, one who was actively considering a licence extension for the company in Victoria.

Rytenskild’s counterargument is likely to be that he was never told of the investigation, that he never uttered the remark, and that he was never given an opportunity to respond to the allegation before the decision was made to end his career at ­Tabcorp.

Instead, he was informed of the probe on the day of his exit and given less than one hour’s notice to decide whether he preferred to resign or be sacked, a window of time too short to seek legal counsel.

By electing to resign, as he did, Rytenskild was entitled to a six-month payout of his $1.5m base salary. But by accepting those terms he also lost between $5m to $10m in unvested shares and options, along with long-term bonus payments worth a further $1.5m. Had he chosen to be sacked, Rytenskild would have received his full-year salary but not the entitlements.

Tabcorp might even move to settle the matter, given some of the pain these hearings could cause to the company. Certain board members are in line for cross-examination, among them Tabcorp chair Bruce Akhurst and directors Raelene Murphy and David Gallop, who were said to be critical in the discussions of Rytenskild’s termination.

All of which makes for a very unpalatable and unnecessary distraction for newly appointed CEO Gillon McLachlan, who’s already battling a share price that – outside of the Covid plunge in March 2020 – is sitting at a decade low of 61 cents.

Watchdog wounded

A trove of emails released from corporate regulator ASIC have shed some light on the rumpled feelings of senior staff in the wake of a damning Senate report into the organisation.

Chaired by Liberal senator Andrew Bragg, the economic references committee absolutely savaged ASIC last month, saying it had “comprehensively” failed as a regulator, existed “without transparency, few prosecutions”, and that it should be split up because it was weighed down by “a litany of cultural, structural and governance issues”.

This wasn’t met well inside the agency. On the day of the report’s release, high-ranking officials sent soothing messages to each other, and to staff, reassuring everyone that their work wasn’t all in vain.

ASIC chair Joe Longo. Picture: Jane Dempster

Executive director Tim Mullaly, whose enforcement and compliance section was panned by the committee, said the report was “not an easy read” but that he remained “extremely proud” of ASICs efforts.

Even ASIC chair Joe Longo chimed in with an all-staff pep-talk.

“The report is challenging to read. It is broadly critical of ASIC’s remit, our approach to enforcement and reports of misconduct, governance and culture,” he said.

But, he added, it didn’t reflect “what I or the commission think of you or the work you deliver”. “We have confidence in you. And we are extremely proud of the outcomes you achieve,” he said. “I acknowledge it is upsetting when we are criticised. However, please do not lose sight of your long-term contributions in the face of short-term commentary.”

To which Mullaly replied: “Thanks Joe – not quite water off a duck’s back, but we’ll get on with the things that matter.”

Quick decisions

If only the Nine Entertainment board and its chair Catherine West could be as adept with an axe as James Chessell.

The Financial Review editor-in-chief arrived on Monday, his first day in the role, with an announcement that editor Fiona Buffini would be succeeded by the Sun Herald’s Cosima Marriner. A 25-year veteran of the paper, Buffini is remaining at the masthead to oversee the paper’s digital transition, with a fresh announcement on her future expected next year.

Nine Entertainment chair Catherine West.

Chessell’s arrival also presaged a round of redundancies expected in the coming weeks, among other cuts and “opportunities we should focus on”, he said in an email. Among these are immediate tweaks to the paper’s grammar and usage rules, which are clearly a top priority. “The one thing that can’t wait … is the use of ‘impact’ as a verb – it is still banned!” he said.

Still yet to be cut at Nine, however, is CEO Mike Sneesby, who’s managed to survive a staff revolt and his showboating with a torch at the Paris Olympics. A lesson for West in this, surely, from the incoming EIC.