Executives ignored crisis warning signals, say some minority investors. After postponing 2008’s results, Orco Property Group finally published unaudited results of nearly €400 million in losses, significantly greater than even the most pessimistic predictions.
The global recession has understandably hit companies across the board, but the group was too ambitious in its rapid expansion in the period preceding the crisis, said a Czech shareholder who is leading the charge to force changes at the company’s top level.
“It’s a typical crisis that gave off signals in the past, and the present management underestimated it. They got caught with their pants down,” said Luboš Smrčka, chairman of SOS Orco, an association formed in February to protect the interests of small shareholders.
“Orco’s management took risks in the past that proved to be inappropriate and unsuitable.” The association controls nearly 10% of the company’s shares, and members are planning to attend the company’s April 30 general meeting in Luxembourg.
While the group has previously expressed a desire for CEO Jean-Francois Ott to resign, Smrčka said the group will wait and see what additional information comes out of the meeting. (BBJ, Napi Gazdaság)