PwC spin-off Scyne Advisory is looking like a bit of a jealous boyfriend, the way it’s behaving so possessively with staff.
Lawyers for the firm have rushed off to the Supreme Court and are shaking their fists, trying to block newly-signed partner Connie Heaney from leaving to join Downer Group, with whom she’s been playing a very involved game of footsie over the past couple months.
Whether or not anyone would call Downer an actual competitor to Scyne, well, best we leave that for the court to decide. But, seriously.
In an urgent filing on Monday, Scyne moved to block Heaney from leaving the firm’s office in Canberra, with Heaney given until Wednesday to file a defence before the case is heard on Thursday.
The problem, as Scyne sees it, Heaney’s heartless dumping of Scyne and recruitment to Downer is in breach of her employment contract and the very stringent six-month non-compete written into the paperwork she put her name to last year.
And these talks with Downer all seem to have transpired within weeks of Heaney joining Scyne in November; just after the spectacularly awkward birth of the consulting practice as it was being not only spun off but actually kind of flung away from the mothership at PwC Australia. Allegro Funds bought it for a buck.
Heaney’s been working as an executive in the Scyne defence practice ever since, her feet barely under the table before Scyne’s leadership were informed of her decision, around Christmas, to resign.
And so why the rush to sue now? The timing’s cute. Heaney was supposed to start her first day at Downer on Monday.
So here’s Scyne, trying to enforce a non-compete and put Heaney on gardening leave which, if they’re successful, could have her sidelined for up to a year. That sounds bad, but it’s actually even worse for PwC partners — they face the same strait-jacketing for up to 18 months if they try to leave.
Justice Guy Parker has the call, Scyne having engaged their buddies at Marque Lawyers for the job. This all, weirdly, from the same firm which told NSW parliament in February it wouldn’t dream of pursuing “profit over purpose”.
Stubbins resurfaces
Speaking of PwC, there’ll be an appearance from Kristin Stubbins in federal parliament on Tuesday, fresh out of her retirement, to answer questions before Deborah O’Neill’s joint committee on corporations and financial services.
She’s there to cough up intel on PwC, of course. Stubbins will arrive as a private citizen two months after ending her three-decade career at PwC, the zenith surely being her stint as interim CEO last year while the whole place was up in flames.
No luck keeping that gig full-time, sadly, with Singaporean transplant Kevin Burrowes swooping in to snatch it. But, Stubbins took the news in good stead and moved into Strategy and Transformation, trying it before shedding the job by October when, announcing her resignation, she basically said she’d had enough.
And since then? Well we haven’t heard much out of her. She’s self-employed, according to her LinkedIn profile and “working on (her) next chapter”. Except she knows exactly where the bodies of 2023 are buried, and we expect O’Neill and the others will be demanding their pound of flesh.
Excelsior revolt
And look, it was bound to happen. Leanne Catelan’s Excelsior Capital is sitting on roughly $120m in cash from selling a chunk of its business last year, but long-suffering shareholders aren’t loving the trickle of returns they’ve been forced to endure.
Promised in the 2016 prospectus was a very modest return of the official cash rate plus 2 per cent. Instead, the investment portfolio’s been recording ugly declines since FY18, the company’s investors sporting lint at this point.
There was an opportunity to do right last week at the end of reporting season, but it was squandered, as we reported.
The hope was for a monster dividend out of all the cash on hand, or a takeover by Catelan, the company’s largest shareholder. Instead, the Excelsior board declared a very tight distribution of 3.5c per share, which has only infuriated said investors and left Catelan — daughter of RP Data founder Ray Catelan — and directors Danny Herceg and Ryan Mount very much cruising for a requisitional bruising.
And that’s exactly what’s happened. Shareholders Warwick Sauer and Ben Graham have called for an Extraordinary General Meeting under 249D of the Corporations Act to wind up the company and place it into liquidation with the help of guiding hands BRI Ferrier.
A members’ statement issued on Friday makes the point rather well: “Every single major asset class made money over the last seven years,” it says, pointing out Australian shares returned 80 per cent and international shares 118 per cent.
“But not only did ECL lose millions over that same period, in every single year it failed to get anywhere near its own performance objective.”
Liquidation, they say, would see Excelsior’s shareholders delivered $5.80 of cash, investments and franking, or basically 100 per cent of the shares’ underlying value.
Selling them on-market would yield a touch above half that amount, with the company currently trading around $3 per share.
It’s doubtful whether the board will actually recommend to shareholders they vote in favour of liquidation — it just ain’t gonna happen.
But, in the spirit of squeaky wheels, the board might be forced to do something useful as an alternative. After all, who’s got time for a shareholder oppression case?
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