Poor first impressions

John Callaghan has plenty of business experience, but judging by his performance on RTE radio's Morning Ireland last Tuesday in the immediate aftermath of John Smyth's departure from the top job at First Active, he has an awful lot to learn about dealing with his unfortunate shareholders.

Any of them listening in that morning would have been forgiven for expecting a more forthright response to the legitimate questions posed.

Mr Callaghan and the First Active board are under no legal obligation to tell shareholders exactly how much John Smyth is getting in his severance package - at least until the 2000 annual report is published in the spring of next year.

By then, no doubt, whoever is running First Active will be hoping that the share price has recovered to take some of the steam out of shareholders' anger at how First Active has been run in the past couple of years. But if First Active has any consideration for shareholders, who have seen their investment plunge in line with the calamitous fall in the share price, then it should supply them with the full details of that severance package.

Otherwise, shareholders - and the vast bulk of First Active shares are held by small investors with less than 1,000 shares - can be forgiven for believing that they are the only ones who have suffered financially from the debacle since the flotation 15 months ago.

There is a strong view in sections of the market that whatever his attributes, Mr Callaghan - who will be an acting chief executive of First Active until a replacement for John Smyth is found - is not the visionary required to restore the bank's fortunes.

Those adhering to this view will be hoping that the process of selecting the new chief executive will not be a lengthy one. And Current Account will need some convincing that they are not correct in their analysis.

Mr Callaghan's experience of running a public company is confined to a brief period between 1991 and 1993 as chief executive of Fyffes. Reflecting on those years, the fruit company's chairman Neil McCann subsequently told the Financial Times of the need for urgency in "a rather special business. It requires an urgency. Prices change by the hour and the minute. It's more like the bookies at the races".

Such urgency is one attribute that will be required now of Mr Callaghan in sorting out the current mess at First Active.