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Photo-Me bosses forced to resign


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From the BeeB

Photo-Me bosses forced to resign

The top two directors of troubled photo booth operator Photo-Me International have agreed to step down from their posts under pressure from shareholders.

Vernon Sankey, the firm's chairman, will not seek re-election at its October AGM while chief executive Serge Crasnianski said he would retire early.

The announcement came after two major investors ganged up on the duo, claiming widespread support.

Frustration over Photo-Me's management has been bubbling for some time.

Investment company Principle Capital and hedge fund Cycladic, which together own 18.2% of the Surrey-based company, have been increasingly unhappy with the way Photo-Me's business has been run.

'Insufficient progress'

Profits have taken a beating over the past few years as the ease with which digital photographs can be distributed electronically now means there is less demand for photographic prints.

The company has been looking to sell its core vending business, which is responsible for photo booths and the media kiosks which process prints from digital cameras and phones.

But Principle Capital and Cycladic said they felt that progress with the sale and other aspects of a strategic review launched last year was insufficient.

The succession issue must be smoothly managed to avoid further unnecessary and damaging disruption

Photo-Me chairman Vernon Sankey  

They accused Mr Sankey and Mr Crasnianski of "operational mismanagement" and noted a "long history of poorly managing investor expectations".

The investors threatened to call an extraordinary general meeting (EGM) where they said they would have the support of more than 50% of the firm's shareholders to oust the bosses with immediate effect.

Photo-Me insisted that an EGM would "jeopardise" the vending division disposal, in which they say there is a lot of interest and, if successful, would return a significant amount of capital to shareholders.,

The firm said that it would discuss its proposals for change with the rebel investors.

These include the chief executive retiring after the vending division has been sold and once a successor has been chosen.

"The board is unanimous in its belief that the continuation of the vending division disposal process is the right one at the moment," Mr Sankey said.

He added that the management changes "must be smoothly managed to avoid further unnecessary and damaging disruption to the business".

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