The company secretary of the Perth-based online publisher, The Market Herald, told the ASX that it had received a notice under Section 249D of the Corporations Act 2001 executed by David Brian Argyle requesting that “the company call and arrange to hold a general meeting to consider the removal of Jagdip Singh Sanger as a director with immediate effect”. 

David Argyle “states that he holds at least five per cent of the votes that may be cast at a general meeting of the company” the filing said. 

Within 24 hours the board of The Market Herald announced that it “has resolved that Mr Jag Sanger will no longer be managing director of the company”.

Tommy Logtenberg

“Mr Sanger has been placed on leave and during that time will not be performing an executive role in the company,” the announcement said. Mr Sanger will continue as a non-executive director, it said.

“The action has been taken following a review of company operations and ongoing discussions with the board on the future direction of the company.”

The company immediately appointed Tommy Logtenberg as acting chief executive officer “with immediate effect” and said it would commence a search for a suitable replacement for the role of managing director.

Mr Logtenberg is the current chief financial officer of Gumtree Australia, Carsguide and Autotrader and has previously held the position of global finance and strategy manager at eBay Classifieds Group. He has also held the position of manager of M&A at CRH in Amsterdam, the world’s biggest building materials supplier.

The statement said: “Mr Logtenberg is an experienced hands-on finance and strategy (M&A) professional with an international focus and corporate finance background. The Market Herald advises that a contract defining the terms of Mr Logtenberg’s employment as acting CEO is being finalised and the key terms will be provided when it is finalised in accordance with listing rules.”

“Non-executive chairman Alec Pismiris and non-executive director Gavin Argyle, who is David Argyle’s son, will also increase their involvement to support the company during this transition period,” the statement said.

The company said that the announcement did not lift the trading halt in its shares.

The drama started last Thursday when the company secretary sent a notice to the ASX saying: “The Market Herald Limited advises the company will undertake the necessary steps to convene a general meeting in compliance with the Corporations Act. Further details of any general meeting will be circulated to shareholders in due course.

Jag Sanger

The filing said the directors are required to call the meeting within 21 days of receipt of the notice and the meeting must be held no later than two months after receipt of the notice. 

Within a day of the call for Mr Sanger to be dismissed, The Market Herald’s company secretary requested that the securities of The Market Herald Limited “be suspended from quotation immediately at the request of TMH pending the release of an announcement regarding an update on financing initiatives”.

However before a meeting could be called Mr Sanger emailed colleagues saying that he was leaving the business. 

The Market Herald website said that David Argyle owns 52 million shares in the company.  He is the father of Gavin Argyle. Gavin Argyle is a director of the company with 17 million shares. 

Mr Sanger owns 13.5 million shares.

The move comes just three months after The Market Herald purchased Autotrader Group, including Gumtree Australia, CarsGuide and Autotrader Australia.

As reported in GoAutoNews Premium in August, The Market Herald paid $US60 million ($A87 million) for the Australian online properties which were one part of a purchase from eBay two years ago for $US9 billion by Norwegian media conglomerate Adevinta.

Adevinta immediately put the Australian Autotrader Group assets back on the market because it said at the time the Autotrader Group (along with some South African online properties in the eBay deal) was not core to the Adevinta business model.

The move made The Market Herald Australia’s number two player in auto classified advertising behind Carsales.

Under the deal between Adevinta and The Market Herald, Adevinta is providing a vendor loan to The Market Herald for about $60 million which is repayable within a year. 

The Market Herald will also raise about $27 million from shareholders by issuing new shares at 34 cents each.

The deal was expected to be finalised by the end of this year. The Australian newspaper speculated that the acquisition caused a rift within the publishing company because of financial pressures it created.

The Market Herald currently has 195 million shares that are presently trading at 50 cents (before the trading halt) making a market capitalisation of $97 million (only $10 million more than the purchase price it paid for Autotrader Group). The Market Herald’s latest reports show revenue of $23 million and a profit of $10.82 million.

Mr Sanger, is well known in the auto media and auto retailing worlds. He was chief marketing and strategy officer for Automotive Holdings Group and acted as a director or alternate director of AHG digital media investments including Carsguide during its publishing joint venture with NewsCorp. He also held executive roles in Australia with Fairfax Media as GM strategy and M&A.

By John Mellor