Amid sliding stock prices and an investigation by Australian securities regulators, Aristocrat CEO Des Randall is getting out.
Randall and chief financial officer Lionel Jeyarai announced last week that they will leave the company in the near future.
Group general manager of sales David Creary was appointed acting CEO and a former Aristocrat executive director, Stephen Cohn, has agreed to help the board with the recruitment of a new CFO and other changes.
The latest shakeup at Aristocrat comes after a disastrous profit warning in February saw its share price drop by more than 50 percent. Initially blaming a soured South American contract, Aristocrat days later acknowledged difficulties in the important North American market.
As GamingToday reported those problems last month, Mark Newburg, president of Aristocrat Technologies Inc., and two other executives, announced they were leaving the company.
Aristocrat shocked investors when it revealed that it had lost a key South American contract for 3,000 electronic gaming machines, and followed that with a warning that its North American operations were trading below expectations.
The Australian Securities and Investments Commission is currently conducting a full investigation into the timing and disclosure of Aristocrat’s financial reports.
Randall was charged with overseeing a review of the Americas business and told the market several weeks ago that he felt it was his job to stay on and put things right at the company.
Chairman John Ducker said the review revealed "a range of issues," primarily involving contracts with four customers in three South American countries.
Associated write-downs and adjustments are expected to lead to charges against Aristocrat’s 2003 accounts in the order of $ 8.6 million after tax. There will be a further A$1.9 million charge against the U.S. business for restructuring costs.
Ducker said, "We are confident that the new teams and restructuring that we have put in place will enable Aristocrat to recover, to rebuild and to regain the trust and respect of our employees, shareholders and customers."
He added a new North American management team is already reinvigorating the business and "performance continues to improve."
Financial and operational controls within the Americas division have been strengthened, and headquarters has taken a larger role in operational and financial decisions.
New parameters have been laid down for conducting business in South America and a new remuneration policy for senior executives has been devised, aligned more closely to company goals.