FT: United Group country CEOs join other managers in protesting against ousting of founder Dragan Solak

In a letter sent this week to United Group’s board, eight operating company chief executives at the sprawling telecoms and media group reproached the private equity firm for running the business in a way that risks causing “long-term damage”, after it fired the company’s founder Dragan Solak and chief executive officer Victoriya Boklag, the Financial Times said.

All but one of the CEOs of United’s operating companies — representing entities that contribute 90 per cent of the group’s cash and about 70 per cent of its earnings before interest, tax, depreciation and amortisation — signed the letter, seen by the Financial Times, demanding the pair be reinstated.

The breach between United’s private equity owner and its management comes after the board fired founder Dragan Solak and chief executive Victoriya Boklag in June.

Solak, the owner of English football club Southampton FC, has since locked horns with the private equity firm over his dismissal from the company he founded in Serbia in 2000, and which has grown to €2.7bn in annual revenues.

The Serbian-born billionaire has sued BC Partners, alleging he had not been paid a €200mn bonus linked to the sale of some of the group’s assets, and has called on Dutch authorities to investigate a “serious governance crisis” at the media company.

BC Partners has said it will pay his bonus, according to people familiar with the matter. The Dutch court rejected Solak’s request to have the claim’s considered urgently.

United Group has previously said Solak’s complaints “solely serve the interests of Solak, and not United Group”.

In the last year, Solak, who continues to have a minority stake in the business, has tried to buy BC Partners out of the company but had his offers rejected.

His stake continues to gives him sole responsibility for awarding shares in United’s incentive plan to managers, according to people familiar with the matter.

A group of 14 senior managers at United, including the chief financial officer and chief operating officer but excluding the country CEOs, wrote to the board in the wake of Solak’s ousting.

They highlighted “deep concerns regarding the recent leadership changes”, which they said had caused a number of senior employees to resign, Bloomberg previously reported.

“Sudden and unprepared regime change was not only a random but also a very irresponsible decision — and thus an existential threat to United Group and its businesses,” those managers wrote.

United Group’s board and BC Partners have dismissed those claims as being greatly exaggerated, according to people familiar with the matter. However, in the most recent letter, another eight United executives echoed the concerns of the original 14 managers.

“We join the Group’s broader senior management in stating explicitly: this is an unsustainable situation for United Group and for our operating companies,” the operating CEOs said.

They added that they were increasingly concerned by the “rapid introduction” of external consultants surrounding the new leadership team.

“Group management, with which we were closely collaborating, is excluded from governance and decision-making processes,” the latest letter said.