Hubbard and Friedrichsen quit Queensgate
Andrew Hubbard and Holger Friedrichsen have resigned as directors of Queensgate Hotels & Leisure.
They quit on Wednesday just a few weeks after rumours began circulating in the industry relating to problems in the Cape Town-based group which is listed on the JSE.
Hubbard was CEO and Friedrichsen an executive director and both have also resigned from all Queensgate subsidiaries. They remain major shareholders although the price of Queensgate shares which are listed on the JSE has collapsed.
Their business relationship goes back more than 20 years. They started a real estate company in 1992 and their involvement in the South African hotel industry began in 1997 with an investment in what was then the Villa Via Hotel at the Cape Town Waterfront.
There is no reason to suspect that business at any operating hotel in which Queensgate, Hubbard or Freidrichsen may have an interest will be affected.
Their decisions to quit came just days after Queensgate announced that a steering committee had been appointed to probe problems at the company. Queensgate Hotels and Leisure Ltd also warned its shareholders that it expected to report a sharp decline in earnings for the six months to the end of February.
In an official statement, Queensgate said: "The variance is mainly due to the poor trading and economic environment in which Queensgate has operated over the last 12 months.
"In addition, the variance also relates to the recent cancellation of certain major leases some of which were held with Queensgate Holdings Limited, an associate and major shareholder in Queensgate, which cancellation has had a direct major impact on Queensgate. The cancellation of such leases has resulted in a decision by the directors to impair goodwill and unwind the prepaid operating lease asset through the statement of comprehensive income."
On Friday last week the board of Queensgate appointed a steering committee, together with Colin Human as the executive chairman and Deon van Rooyen as a strategic director (acting as financial director), to address the problems affecting Queensgate.
The official resignation announcement today said:
1. Mr. Andrew Hubbard has resigned as chief executive officer of the
Company, and all of its subsidiaries, effective 3 March 2010; and
2. Mr. Holger Friedrichsen has resigned as an executive director of the
Company, and all of its subsidiaries, effective 3 March 2010.
"The aforementioned changes to the board are to avoid any potential conflict of interests that may arise in future and to facilitate any future restructuring that may be required by the company.
"The current remaining executive directors, namely, Messrs Colin Human and Deon van Rooyen, will assume full responsibility for the executive management of the company and its subsidiaries together with the assistance of the task team comprising of strategic shareholders and role players in the company.
"The aforementioned task team has engaged with key stakeholders and executive management of the company during the past two weeks and will engage with third parties and potential future role players to formulate a strategy that may include a restructure of the company."
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