A cryptic EOH SENS notice on Friday sparked speculation that a boardroom brawl may be brewing at the technology service provider.<\/p>\n
EOH informed shareholders that it \u201chas been approached by certain shareholders regarding the succession plan for the board\u201d.<\/p>\n
\u201cThe board is engaging further with the shareholders. Pending further announcements, shareholders are advised to exercise caution when dealing in EOH securities,\u201d it said.<\/p>\n
The announcement came less than an hour after the company announced Jesmane Boggenpoel had resigned with immediate effect.<\/p>\n
Boggenpoel is a managing partner at private equity fund AIH Capital and served on the EOH board since 2019.<\/p>\n
EOH did not provide a reason for her resignation. It also did not say which shareholders approached the board or what is meant by a \u201csuccession plan for the board.\u201d<\/p>\n
However, shareholder upheaval is not unexpected. They have lost a lot of money, and EOH has no clear growth path.<\/p>\n
The last five years have been a trying time for EOH as former CEO Stephen van Coller tried to steady the ship.<\/p>\n
When Van Coller took the reins, the share price was on a downward trend. It traded at R40 per share, well below its highs of over R100 two years earlier.<\/p>\n
The company was under pressure because of its growing debt burden, reports of corruption and mismanagement, and poor corporate governance.<\/p>\n
He was there to fix the problems created by his predecessors while growing the company and creating shareholder value.<\/p>\n
He focused on two things: addressing corruption at EOH and reducing debt. He succeeded admirably in both departments.<\/p>\n
However, it came at a price. Shareholders lost most of their money, and he sold many of the crown jewels to repay the banks.<\/p>\n
Shareholders also had to fork out a lot of money in a rights issue in 2023 or face significant dilution.<\/p>\n
Following the rights issue, Van Coller introduced a new strategy and welcomed a new era for EOH, dubbed EOH 2.0.<\/p>\n
Van Coller added that the company was now well-positioned to make significant investments in the growth of the business.<\/p>\n
At the time, the share price was around R1.70, and shareholders were upbeat that the time for growth had come after years of pain.<\/p>\n
However, this did not happen. EOH continued to deliver disappointing results, and the share price plummeted to R1.05.<\/p>\n
To add to shareholder pain, both Van Coller and CFO Megan Pydigadu resigned and left the company over the last year.<\/p>\n
EOH chair Andrew Mthembu took over running the company as acting CEO on 1 April 2024, with the search for a permanent chief executive ongoing.<\/p>\n
It is, therefore, no surprise that shareholders are looking for stability and a clear path to growth for the struggling IT firm.<\/p>\n
However, it may not be all bad. Earlier this month, EOH announced that Peresec pumped money into EOH and now holds 5.06% of the company\u2019s ordinary shares.<\/p>\n
After this significant investment, Peresec may be looking to strengthen the board and create stability at the company to bolster its performance.<\/p>\n","protected":false},"excerpt":{"rendered":"
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