Datalex’s outgoing chair says he would ‘like to have done a far better job’
Paschal Taggart says ‘somebody’s got to fall on their sword in these situations’
Datalex CEO Aidan Brogan and outgoing chairman Paschal Taggart at an EGM at which Paschal Taggart apologied ‘unreservedly’ for its recent problems. Photograph: Alan Betson
Datalex chairman Paschal Taggart told shareholders on Friday he would “like to have done a far better job” as he confirmed he will step down in the coming months as the travel software provider has been left reeling by the discovery of accounting irregularities.
Mr Taggart made his comments during an extraordinary general meeting in Dublin at which investors approved a €6.15 million loan from the company’s main shareholder, businessman Dermot Desmond, to shore up its finances.
“I would like to apologise unreservedly to all shareholders, to the staff recently made redundant and their families, to our staff and their families, and to our customers,” Mr Taggart said, adding that the group is now “working with the regulatory authorities and now communicating with our lawyers and auditors almost on a daily basis” as it seeks to overcome its problems.
Datalex shares have plunged by as much as 75 per cent since the company warned in January that it expected to post up to a $4 million (€3.6 million) earnings before interest, tax, depreciation and amortisation (ebitda) loss and disclosed suspected accounting irregularities, that have since been confirmed.
The revelations prompted Datalex to cut jobs and contract roles to save $10 million annually from next year. The company has repeatedly declined to comment how many jobs have been eliminated. About 500 people worked for the company at the beginning of the year, including employees and contractors.
Mr Taggart told Friday’s meeting he will be stepping down as Datalex chairman after nine years at its next agm, expected to take place over the summer, and that he had been planning to retire for some time. Still, he signalled to reporters after the meeting that the decision to step down at this time was also linked to the company’s current woes.
“Somebody’s got to fall on their sword in these situations,” he said.
The €6.15 million loan from Mr Desmond, which carries a 10 per cent interest rate, is in addition to €3.9 million of new shares that the billionaire bought in the company last month to shore up its finances. That move increased his holding from 26.4 per cent to 29.9 per cent.
The fresh funds will bolster the company’s financial position after its cash level fell by almost 50 per cent last year to $8.8 million.
Datalex’s chief executive Aidan Brogan did not make himself available to speak to reporters after the shareholder meeting, which secured 100 per cent shareholder backing for the loan by those who took part in a vote.
On Tuesday, Datalex revealed its shares will be suspended from trading on May 1st as the company misses an end-April deadline to publish its latest annual figures under market transparency rules. It is understood that the report will not be published until the middle to the end of June.
US asset-management giant Capital Group moved following the announcement to sell its almost 7 per cent stake in Datalex. However, Dublin-based businessman Nick Furlong’s Pageant Holdings disclosed it has built up a 3.99 per cent stake.
Pageant, which at one stage had a 12 per cent interest in Datalex, slashed its holding in the first half of 2017.