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Quarto coup amid rising debt

With the publisher on its knees, Quarto's founder has cast himself as the white knight in a dramatic boardroom coup
May 24, 2018

Book publishers need a nose for a good plot twist. Kudos then to Laurence Orbach, the founder and one-time chief executive and chairman of Quarto (QRT), who has stormed back into the fold of the illustrated book group in a dramatic boardroom coup.

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Dr Orbach, who was himself ousted from the company in 2012, joined forces with fellow shareholder Chuk Kin Lau at last week’s annual meeting to call for the removal of chairman Peter Read, and non-executive directors Leslie-Ann Reed, Jess Burley and Claire Capeci. Despite owning just 47 per cent of shares between them, the pair succeeded in convincing enough shareholders to eject the directors, and vote themselves onto the board instead.

With Dr Orbach installed as executive chairman, and Mr Lau as executive director, the fate of incumbent chief executive Marcus Leaver is likely to come under scrutiny. The arrivals will also be joined by former Quarto CFO Mick Mousley, and Mei Lan Lam, the CFO of Hong Kong-listed printing group Lion Rock, which is both controlled by Mr Lau and, as per its website, a major supplier to Quarto.

The resolutions – which are legal in Delaware, where Quarto is domiciled – drew raised eyebrows from one shareholder. “In a de facto sense this looks a bit like taking control on the cheap,” said Cavendish Opportunities fund manager Paul Mumford. “It looks very likely that minority shareholders will have their interests effectively sidelined.” Despite that, Mr Mumford told us that the boardroom manoeuvres had prompted him to top up his holding. "I think they should have a plan that suits both parties," he said.