Stephen van Coller, the chief executive officer of troubled information and technology services company EOH, states his ethos, on his LinkedIn profile, as being committed to disrupting traditional business to promote African continent growth through social inclusion. But what he’s doing at EOH isn’t going down with investors in EOH stock – or insiders. MyBroadband picks up on how Van Coller has been doing at the helm of EOH over the past 18 months. Unfortunately the falling EOH share price appears to rate his efforts as a “fail”. Meanwhile, sources have told MyBroadband that Van Coller’s management style is going down like a lead balloon among staff members. Their article is republished here on BizNews, with permission. – Jackie Cameron
From MyBroadband
EOH is not doing well. It has to address a big debt burden and is trying to rid itself of the image of a corrupt company – and this has to be done in a very tough economy.
At the forefront of the company’s planned turnaround are a new board, its CEO Stephen Van Coller, and his new management team.
Van Coller took the helm at EOH in September 2018 amidst corruption allegations and a plummeting share price. He quickly realised that the problems at the company ran deep.
Serious corruption was unearthed and Microsoft terminated EOH’s licence-reseller partnership.
Van Coller, with guidance and instruction from his board, started to clean up the business from a governance and financial perspective. This, however, is not a quick and easy process.
He said EOH has had its toughest year since listing on the JSE 21 years ago. This included a slowdown of its business pipeline because of reputation and credibility problems.
Despite addressing corruption at EOH and selling assets to reduce the company’s debt, the market did not like what was happening at the company.
The share price declined from R40.00 per share when Van Coller took over as CEO to less than R3.00 per share.
Company insiders question Van Coller’s leadership
Certain executives are now questioning Van Coller’s strategy and leadership style, arguing that it is damaging the company.
MyBroadband received feedback from two high-level executives, who asked to remain anonymous, who feel that Van Coller is not doing what is in the best interest of EOH.
One executive told MyBroadband that Van Coller replaced many EOH IT executives with bankers who do not fully understand the IT business.
He also said Van Coller uses expensive consultants for guidance instead of listening to his own executives.
These consultants include ENSafrica, which investigated corruption at the company, Rothschild & Co, Delta Partners, and PwC.
Another complaint is that Van Coller is positioning himself as a corruption fighter in the media, which makes EOH look like a company riddled with corporate governance issues.
According to one executive, Van Coller’s “crusade” is creating fear and uncertainty at EOH, which is hurting staff morale.
He added that the situation is aggravated by unflattering statements from the CEO about certain EOH staff and executives.
Additionally, there is talk that EOH is running out of money and that it faces liquidation unless appropriate measures are taken.
Van Coller has even been accused of acting on behalf of the banks and selling the company in bits as “spare parts” to repay them.
Van Coller responds
Van Coller told MyBroadband that he has heard many of these accusations before and they often come from people implicated in corruption.
He said his focus as EOH CEO, as guided by the board, is to save the company’s core business – now known as iOCO. It accounts for around 60% of the business.
He explained that the sale of non-core businesses is needed to reduce the company’s debt and reorganise the business.
EOH has already sold many non-core assets and is looking to generate another R1 billion in 2020 from further sales.
He dismissed allegations that he is acting on behalf of the banks, saying he is focussed on doing what is needed to create a strong and sustainable EOH.
Additionally, there is no talk of liquidation. He said the company has valuable assets and still generates a lot of revenue.
He also dismissed arguments that he is wasting money on consultants. Van Coller said consultants were needed to ensure an objective and transparent investigation into corruption at the company.
He said the transparent process, which included an in-depth corruption investigation by ENSafrica, did a great deal to restore trust in EOH.
Van Coller said EOH’s admittance of guilt and its public crackdown on corruption has also helped it to avoid the level of backlash other companies implicated in corruption – like KPMG and McKinsey – have received.
He said that most of this work is now done and their consultancy costs will drop significantly going forward.
Strong IT skills at an executive level remain – CEO
On the subject of employing “bankers”, Van Coller said that while he has employed several executives with banking backgrounds, they were hired for very specific purposes.
These include heading up mergers and acquisitions, and other tasks which are suitable for financial experts.
He said other positions were filled by IT executives within the company to ensure that EOH’s IT skills base remains strong.
Many of these executives report directly to Van Coller and have been given the responsibility to create strategies for their divisions.
He added that EOH continues to boast exceptional technology skills, which is why it is trusted by the government and enterprise clients across the country to run their IT systems.
He said staff morale is also improving because of more transparency at the company, which includes a new mobile communications platform.
While there is some negativity at NEXTEC because of changes at the company to improve performance, Van Coller said iOCO staff are happy and motivated.
