Former Dick Smith Chairman Rob Murray To Be Questioned Over Dick Smith Collapse
Serious questions are being asked as to why Dick Smith Chairman Rob Murray the former CEO of Lion, did not publically raise concerns to the market, when Dick Smith started bleeding cash back in August 2015.
Insiders are claiming that under Murray the former CEO Nick Aboud had a greater say in the running of the Company. They claim that under prior to Murray being appointed daily checks were made by Anchorage Capital Chairman Phil Cave and executives from Anchorage relating to Dick Smith expenditure, cash flow and investments.
“Under Murray Aboud was basically running the Company, he had a lot more say in the day to day running of the Company and he was basically left alone to get on with making as opposed to when Phil Cave was running the Company” said a well-placed insider.
“Cave and executives from Anchorage were checking daily on cash flow, sales and investment into new stores. There was not the same level of due diligence under Murray” they said.
Since departing brewing and food giant Lion in 2013, where he was chief executive for nearly nine years Murray took on several roles. He was chairman of wholesale grocer Metcash and he was a non-executive director of Southern Cross Austereo.
Metcash at the time was structurally challenged, with the supermarkets Coles and Woolworths pressuring the independent IGA network it supplies.
Dick Smith was heading into headwinds and Southern Cross was facing a profit has slumped as it lost market share in the Sydney metro radio market.
When he was appointed he told the Australian Financial Review. “I am drawn to businesses where I can make a difference.”
Back in June 2015 he said that he believed Dick Smith has “more potential than the market understands” and the fashion-oriented MOVE branded stores have a big opportunity, with plans to double the network to 20 outlets.
Even in January 2016 Murray who has since ducked for cover following the collapse of the mass retailer, was saying that he would continue to back Abboud as CEO of the company. “Nick is the best person to get us through this period,” he said on Jan 12, 2016.
Investigators from the Australian Securities and Investment Commission are believed to have already contacted Murray to question him regarding the downfall of Dick Smith which is now under investigation.
It’s also been revealed by Fairfax Media that administrators for failed electronics group Dick Smith are investigating transactions dating back to Anchorage Capital Partners’ ownership of the business.
Administrator McGrath Nicolls’ report, due out in early June, will include details relating to how the Company went from reporting a $43.4-million-dollar profit in August under Murray’s leadership to the receivers being called in in January days after Murray was still singing praises for Nick Aboud.
Receivers Ferrier Hodgson have already referred several issues to ASIC and it’s understood that ASIC is now leasing with legal representatives for several former Dick Smith executives to set up interviews.