Analysis
As Primary Health Care grapples with the resignation of its criminally charged chief executive Peter Gregg, focus has turned to whether the company's chairman Rob Ferguson should also stand down.
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Former Leighton executive details corruption
Former Leighton Holdings executive Stephen Sasse recounts the time he encountered a suspicious $15 million payment authorised by Leighton's then-finance chief Peter Gregg.
Criticism has been flying about Ferguson's handling of the crisis that has engulfed the company following Gregg being charged with two counts of falsifying records while an executive at Leighton Holdings. The critics include sources very close to the company, as well as governance experts, none of whom are willing to be quoted publicly.
Ferguson signed off on Gregg's appointment in February 2015 despite being informed by Gregg he was under investigation by the Australian Securities and Investments Commission.
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Although Gregg was bound by confidentiality constraints on divulging any details of the probe, by April 2016 Primary had more information to hand about the matter when Fairfax Media revealed the investigation related to an allegedly suspect $15 million payment to a Dubai-based consultant in exchange for favourable steel prices.
The company's decision to not ask Gregg to stand aside at that point was probably influenced by Gregg's strenuous denial of the allegations and his decision to sue Fairfax Media for defamation.
No back-up plan
Yet no contingency plan was put in place in case Gregg was charged or accused of civil breaches of the Corporations Act.
That was clear last week when the board took four days after being notified by Gregg of his charges to decide whether to ask him to leave.
The board spent the majority of those four days locked in rolling meetings, assessing legal advice and market feedback about what to do. It wasn't the first time it had received legal advice on this topic.
For a company that appointed Gregg to sort out a lack of succession planning at the business, which was left reeling by the illness of its founder Edmund Bateman, it is concerning that Primary is now left without a clear succession plan to replace Gregg, despite some clear warning signs.
Instead the company's "contingency plan" is to rely on Gregg's 12-month notice period so it can find a new chief executive.
He will remain as "outgoing chief executive" of the company until a replacement is found, and is expected to deliver Primary's results in mid February.
Primary may have taken a risk on hiring Gregg, but there were also rewards.
This will all be while Gregg juggles local court appearances, the first of which is scheduled for January 31.
Risk and reward
Ferguson has declined to comment on the suggestions he should resign, and it's also true some market watchers believe his departure would be damaging.
Primary may have taken a risk on hiring Gregg, but there were also rewards, according to many in the market.
He fixed Primary's balance sheet, "de-Batemanised" the company and buttressed Primary in the face of headwinds, particularly from shifting government policy regarding health funding.
Now, along with finding a new chief executive in the midst of a strategic review, Primary must also contend with the sleeping giant on its register, China's Jangho, which is said to be considering a $2 billion takeover of Primary.