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Just Eat Takeaway.com’s boardroom was in crisis on Wednesday as the chairman resigned and the chief operating officer was suspended just hours before the company’s annual shareholder meeting.
The business has faced strong criticism from shareholders over its handling of the £5.75 billion takeover of US online food platform Grubhub, which it recently said it would be looking to sell.
The board is set to face shareholders in a fiery annual meeting in the Netherlands, where one of its biggest investors, Cat Rock Capital, has said it will vote against the re-election of four out of the six board members.
But chairman Adriaan Nuhn announced he would not be standing for re-election to the board after all and would leave the business as soon as the meeting finished.
Another board member, Jorg Gerbig, will also no longer be considered for re-election and has been suspended after bosses received a formal complaint against him relating to “possible personal misconduct at a company event”.
An investigation has been launched, with an external expert instructed to gather information.
Mr Gerbig said he is fully co-operating with the investigation and that he has full confidence in the outcome.
The company confirmed that the allegations do not relate to financial or reporting issues.
It added: “Mr Gerbig may be put for re-election if the allegations are determined to be unfounded.”
The last-minute announcements ahead of the meeting come a week after activist investor Cat Rock called for a major shake-up of the company, including the removal of finance chief Brent Wissink.
Cat Rock, which owns an almost 7% stake in the company, said the firm made a “mistake” by buying Grubhub and must change its leadership team to help “rebuild its credibility”.
The activist investor said it will vote against the re-election of finance chief Brent Wissink and most of the group’s supervisory board because a 75% fall in the share price was due to bosses giving misleading financial outlooks.
Cat Rock founder and managing partner Alex Captain said Just Eat is a high-quality business with fantastic growth prospects and valuable assets.
But, in an open letter, he added that the chief financial officer (CFO) and supervisory board “have overseen a catastrophic destruction of equity value in the past two years”.
The fall in shares came despite an increase in demand for rapid deliveries during the pandemic.
Just Eat needs a new CFO to restore credibility with the capital markets and a new supervisory board to quickly refocus the business on Europe, use the proceeds of divestitures to strengthen Just Eat’s capitalisation, and actively evaluate other strategic options
Alex Captain, Cat Rock Capital
Despite rising sales, the company has spent millions on marketing and shoring up its operations in the US and UK, leaving it overstretched.
Mr Captain added: “We have been Just Eat shareholders for close to five years and are deeply committed to the company’s long-term success.
“We believe Just Eat’s equity value has decoupled from its fundamentals because of a complete loss of trust in the management and supervisory board’s capital allocation and financial management.
“Just Eat needs a new CFO to restore credibility with the capital markets and a new supervisory board to quickly refocus the business on Europe, use the proceeds of divestitures to strengthen Just Eat’s capitalisation, and actively evaluate other strategic options.”
Fellow investor Lucerne Capital has also said it plans to vote against Mr Wissink’s re-election.
Just Eat confirmed later on Thursday that Mr Wissink’s re-election was passed after it secured approval for all of its resolutions at the annual general meeting.
It did not reveal the proportion of shareholder votes in favour or against its proposals.