The picture painted by Ferrier Hodgson's hearings into the collapse of electronics retailer Dick Smith only gets more gruesome. On Monday we learned that former chairman Phil Cave refused to attend meetings of the board's audit committee, chaired by former Woolworths CFO Bill Wavish, and urged his ultimate successor, former Lion boss Rob Murray, not to either. Hey, never let forensic accounting get in the way of personal rivalry!
That's almost as good as the last hearing, where board member Jamie Tomlinson, Murray's former CFO at Lion, expressed his view thrice that chief executive Nick Abboud was "out of his depth". In the first half of 2015, Tomlinson had emailed Murray to warn of Abboud "gilding the lilies".
Hang on, this bloke is a professional company director, and a former company CFO; so if Tomlinson was concerned that his company's CEO was "gilding the lilies" or "out of his depth", what did he do about it at the time? And what did chairman Murray do, not say, in response to Tomlinson's concern?
Did he, in front of the entire board, or privately, request a briefing and close examination of the P&L;, the balance sheet, the cash flow, the liabilities and when they're due and whether its working capital is killing free cash flow (of which there wasn't any)?
Did Murray face debtors with Abboud with a plan to trade out of its cash crunch and avoid disclosure? Did they front lenders together?
Looks like the same old story – executives from big multinationals with no experience of balance sheet stress, single-minded about earnings. Free cash flow, anyone?
