Busting out of the boardroom

Boardroom bust-ups are probably more common than we think. The whole point of non-executive directors is to challenge the actions of the executives to ensure shareholders’ interests are being protected, so it is hardly surprising that this can result in heated exchanges.

That doesn’t mean that such boardroom contretemps need to be made public. So long as the outcome is the right one, or at least one that everyone can agree to after a spot of compromise, the smooth running of the board need not be adversely affected. As a result, the vast majority of bust-ups remain private.

So it was with some surprise back in June that I read a statement from Comptoir Group, the quoted operator of the Comptoir Libanais restaurant chain, revealing that the board had received a letter from founder and 47.6% shareholder Tony Kitous calling on chairman Richard Kleiner and chief executive Chaker Hanna to resign. He warned the board that if the duo failed to resign, he would vote against Kleiner’s re-election and requisition a general meeting to remove Hanna.

The formal and measured tone of the board’s response to Kitous’s action could not hide what must have been an especially bitter falling out. The board accused the Algerian-born Kitous of “promoting his own financial gain”, acting “in direct conflict with the spirit of his relationship agreement with the company” and limiting the group’s growth strategy.

The independent directors – Kleiner, Hanna and the finance director Michael Toon - went further, accusing Kitous, despite his job as creative director, of “offering limited input” into the running of the business, adding that Kitous “does not possess the required business and commercial judgment to successfully run the company”. Ouch!

There’s more. The directors claimed that if Kitous succeeded in ejecting the chairman and CEO from the board, he could use the group’s cashflow “for his own personal gain” and over time use it to de-list Comptoir Group from the AIM market, effectively taking control on the cheap.

Despite the riposte, at the beginning of August Kitous got his way as Kleiner and Hanna stepped down from the board and two new independent non-executive directors were appointed, one of whom, Jean-Michel Orieux, replaced Kleiner as chairman. The group also appointed a new broker and nominated adviser, FinnCap Group, replacing Canaccord Genuity.

All of which is actually tremendously sad. The story of how Kitous came to Britain aged 18 with only £70 in his pocket, spoke not a word of English and spent his first night at Victoria station is inspirational. Starting out as a pot-washer in restaurants, he worked his socks off to the extent that by the time he was 22 he was able to open his first restaurant, Levant, on Wigmore Street., before opening his first Comptoir venue in 2008.

The recession almost killed the business before it had got going, but one of the lessons Kitous learnt was that he wasn’t a CEO and he appointed Hanna, a Lebanese with long experience of the restaurant industry, to fill the role. In 2016, this culminated in an IPO at 50p a share that raised £8m of new funding and valued the company at £48m.

At the time of the IPO I met up with Kitous and Hanna and spent a very pleasant afternoon enjoying the delicious Comptoir food washed down with a few glasses of Chateau Musar. The two men appeared to get on very well – I very much enjoyed the vibe of their relationship – and sent me away with a couple of Comptoir cookbooks signed by the author (Kitous) and a feeling that this was a business that was destined for good things.

Under the terms of his exit deal, Hanna received a cheque for £720,000 in return for agreeing to waive all claims against the company. As you would expect, nobody is elaborating on what caused the rift between Kitous and Hanna, but one City source familiar with what went on said: “It is very sad to end twelve and a half years in such a way - unbelievable and shocking. It was a brutal experience.”

Two in one day

Funnily enough, on the very same day in June that the Comptoir Group bust-up was revealed, another out-of-the-ordinary statement was issued by a leisure company.

In a two-line RNS, Everyman Media, the cinema operator, said: “Jeremy Summerfield will no longer be joining the board as chief financial officer as previously announced on 31 March 2022.” Again, nobody would elaborate on what had caused this change of mind, leaving us to speculate fruitlessly on the truth of the matter.

By a strange coincidence, both Everyman and Comptoir are/were advised by Canaccord Genuity while the IPOs of both companies were backed by the Kaye family of ASK and Prezzo restaurant fame. Whatever can it mean?