Cell C - Why did Lars Reichelt leave?
Larry Claasen spoke to Cell C chairman Simon Duffy about the sudden departure of CEO Lars Reichelt and other issues facing the company.
Why is Lars Reichelt leaving?
It is for very personal reasons. He and I had spoken about it at some length before he decided to leave. It did not come as a surprise to us.
So the board did not ask him to leave?
Not at all. We were very happy with the way he had led the group. The company has been transformed by his leadership in his 2½ years in the job.
Were there differences in direction that led to his departure?
Lars is clearly the father of the current strategy [of offering a wireless broadband service] and the board has always backed this strategy. We did not have separate visions on the direction the company had to go in. We still believe the one he adopted was the correct one.
How did he change the company?
If you go back 18 months, people thought Cell C did not even have its own network despite carrying the bulk of its own traffic. Lars’s efforts have led to the quality of its network being compared favourably with Vodacom’s in recent surveys. This is a big change for the group. Under Lars, Cell C has been positioned for growth.
Who will be running the company?
I will be leading the company until a permanent appointment is made. As nonexecutive chairman I am familiar with its operations and I expect I will speak to him [Reichelt] quite often on matters affecting the company.
Why then is he leaving with immediate effect? Is it best not to serve out a notice period?
There are different ways of doing things. My view is that there is no right way to go about it. Some believe in having a hand-over period while others believe in a clean break. I tend to like a clean break.
You have not released results in a while. Are you happy with the financial performance?
It’s not been that long since we started offering broadband services. It has only been about a year since we started upgrading our network to cope with offering the data service and naturally it takes time for this kind of investment to pay off.
Is the broadband strategy working?
What I can say is that the shareholders are prepared to invest even more money in the company and they would not be prepared to do so if they did not believe there was no business case for it.
So the group is still following the direction set out by Reichelt?
Absolutely. There are no plans to change strategic direction.
The Financial Mail is South Africa's leading publication in its field. It provides the most comprehensive coverage of investment, business, financial, political and social trend.