- No merit to Mr. Barker-Homek's lawsuit.
- The Company will respond through legal channels at the appropriate time.
- No impact on financial statements expected.
Thursday, 2 September 2010
TAQA Responds: No Merit to Peter Barker Homek Lawsuit
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45 comments:
BM must have a friend working at T's US legal firm. Under US law each side pays its own costs. Issuing the writ probably cost BM zero - defending it will cost T plenty. Is there room for another boat in the marina?
LC2
For this sort of money I should think one could purchase a marina.
Lawsuits can be effective tools for prompting negotiations.
What else is TAQA suppose to say?
I would expect that PBH would not launch this type of case without some evidence supporting his accusations. What is puzzling is that last October 2009 PBH said it was his decision to step down after he and the board did not see eye to eye on future strategic direction.
I expect that he would have protested then, rather than staying silent. He was never one to shy away from the limelight and media.
I have never heard of a CEO stepping down and not getting any compensation whatsoever. The agreement seems too one sided in TAQAs favour and smells like an amateurish attempt to not honour an employment agreement.
Who would sign a 10+ year employment agreement? Someone who could use loopholes to exit the agreement without consequences.
Clash of the Titans: American justice meets middle eastern business practices. This has the makings of a hollywood screenplay.
Anonymous
Spot on - what else can Taqa due except cut a check.
A court case can be a way of increasing negotiating pressure in the hope that T's Michigan counsel advise them that it's better to settle. Though in this case PBH seems to be a bit extravagant in his claim. My suggestion is that they give him an "income bond". If certain defined investments pay off, they'll give him a share of the profit.
Clash of the Titans - I'm seeing an opportunity for Scheherazade Films to do a ME themed buddy movie. A remake of Papillon or the Great Escape. One guy in Bahrain. Another in Dubai. Matthew Perry and Jason Alexander. It would be big.
My guess is that TAQA will pay just about any amount to avoid disclosure of some very embarrassing business practices. There are probably lots of pretty nervous people working in high level positions at the company right now. Something like this was bound to happen sooner or later.
Anonymous
Thanks
Why then let it get to this stage?
Why not pay the "hush" money up front - when he resigned?
TAQA has had many Senior Management leave before without a lawsuit. Maybe they never thought that hush money would not be necessary. Homek is a much more public person than most other people.
Anonymous
Thanks.
Perhaps, the financial circumstances of the Company played a role.
As one friend said to me about his tenure:
"PBH - Lots of flash, lots of dash now the crash"
Young brash upstart PBH with bags of cash
Enters the marketplace with a splash
Purchase after purchase all in a flash
Board realizes it bought trash
He succumbs to the inevitable crash.
Anonymous
Brilliant!
Ever think of writing your own blog?
Read through the Arab press archives. This guy was so full of himself. It was always about him. He spewed out so much bullchit that he finally started believing it himself.
Leadership is more than buying CEO the year titles.
Let this be a lesson to all of you. M&A guys are not company builders. Any idiot can buy a company or a business. It takes real leadership to nurture employees to do their best and create a real feeling of accomplishment.
Sadly, not everyone emulates Donald Trump.
Why just the other day I saw him on the TV selling the "Trump" mattress. You can tell the real estate business is slow in the USA!
Homek didn't lead the company on his own, he had a whole management team and the board had full control over all of the major business decisions. The company loved Homek's public image until it became obvious the business ventures were failures. Many people should share in the blame of failure of TAQA. Homek was simply a front man who became a scapegoat.
Homek shouldn't take all the blame for the failure that the company has quickly become over such a short period of time. The other executives and Board have played their parts. They loved Homek's bravado while the company when business looked good and now that the company is in trouble he is convienent scape goat.
Anonymous
Thanks your comments.
One thing you might consider is using a distinctive name that still protects your identity. That way if there is more than one Anonymous commenter on a post, readers will be able to tell one commenter from another.
Also I've enable "moderation" on any post over 14 days. That means your comments don't get posted until I release "them". So if you post here, you won't see your comments right away.
Anyways keep your comments coming. The most interesting stuff on this blog comes from the readers.
TAQA was suppose to grow to be a $60 billion blue chip company. There may have been a whole management team in place, however, we don't know how much power they really had from CEO and the B of D.
With so much executive turnover in the past few years, something was not right. Executives do not leave companies, they leave their bosses.
The management team dynamics is a red herring. The real issue is TAQA's financial health, which appears to be on life support. Parent company "injections of investments" seem to be the reason the company has not failed.
Looking at TAQAs financial statements, there are a number of unusual transfers of property into the company over the years that do not seem to make any business sense. Homek did say the B of D was trying to park obligations of other companies on the TAQA books.
Are these attempts to mask a terrible debt/equity ratio or to inflate equity without an injection of cash, of to transfer debt from other businesses? Forget about the balance sheet and the statement of income, have a look at the cash flow statement.
What company pays a 8-10% dividend or buys back stock when there is a 8.5/1 debt/equity ratio? TAQA does!
If I were a shareholder, I would be asking "where is the cash going to come from to pay off the mountain of debt?" The company chooses between investing, stock buy back, repaying debt, or paying dividends with its cash flow. Where would you put cash flow if you were in for the long haul?
Should another financial crisis hit, a 2-3% interest rate hike would be a disaster. Is there another Dubai World situation festering or if Homek's accusations of company improprieties are indeed true, this has the potential to become the middle eastern equivalent of Enron. Embarrassing situation all around from a multitude of perspectives.
I've never seen so many people in their 30's on a B of D of a multinational company. May explain the schizophrenic way the company seems to be run. This is like an MBA project or hobby for these multimillionaires.
In addition to the B of Ds, take a look at the bios of the senior leadership team on the website. Some of Execs don't have much in the way of relevant skills and expertise.
Scottie says:
Yes, it was in the quarter press release. Incremental earnings from the Sohar aluminium acquisition, resulted in a significant improvement to TAQA net profit over the Q2 2010 period; a positive progression that creates further value for our stakeholders."
TAQAs business model is robust indeed as he CEO states. When income starts to decline, they roll in additional income earning businesses.
Is the TAQA parent company, concerned? As the major investor in TAQA, they have stayed uncharacteristically quiet on the steps they will take to reassure investors. The Homek-Barker allegations are punishable sins under Sharia, the Islamic law.
May Allah bestow guidance and wisdom during this matter to bring about a swift and just end. May the righteous be absolved and the guilty punished.
Fareed
Roughie
Not a surprising turn of events. Having worked with Peter, he had a reputation for following his own agenda and making others believe it was their agenda too. People soon enough see the forest through the trees. He wants to see the green! Hope that TAQA fights tooth and nail on this.
Roughie
TAQA cannot afford to pay a $490 million settlement. It will wipe out all the profit from the company it has earned since it was formed. How ironic, that the man who architectured the high risk growth model will be the one who brings the company to its knees through the american court system, unless time stalls the inevitable. Then nothing can save the company from pervasively low north american natural gas prices and the free fall in free cash flow. Buyer beware. If it looks to good to be true, then its Peter Barker and his plastic surgery.
Its going to take bags of cash to keep the old oil and gas and power assets from rusting away.
Anonymous
PBH has to win the court case. With appeals and such. It could be many many years.
If the owners want, they can put more assets/cash in to pay. And I would think that shaykhly pride would be more important than shaykhly anger. That is, they wouldn't want to have PBH destroy their national energy champion.
Another example to show our bothers that infidels cannot be trusted and have no honor.
Everyone thought that Peter created the crazy enviornment at TAQA. It hasn't improved since he left which makes me think that TAQA, not Peter is crazy. I hope
Peter brings the company to its knees and frees us all.
Canuck
The Abu Dhabi stock exchange is fraught with high flying Arab companies who are little more than pretenders with blue chip aspirations.
Self regulation leads to self promotion and self preservation.
The ADSX will likely have its own skeletons rattled, just like the SEC in the 1930's. Greed leads to moral corruption. Houses made of cards are easily blown down.
The truth does not require justification. I am more concerned with shaykhly fear, when the fathers learn what the sons on the Board of Directors allowed to happen.
Are there any new developments on this case?
There will be blood to pay for the grave errors motivated by greed, fueled by deceptions and resulting in sin. YOU KNOW WHO YOU ARE. The sheep will not stay silent forever.
The wicked will be swept up by the sands and the righteous honored by Allah.
The issues with TAQA are mostly culture clashes. The Arab culture clashes with the Western cultures where it has holdings. The Arabs do not know how to trust and nurture foreign employees at any level of the company. They deal with all like they are the poor Afghans, Thais, Pakistanis, and Indians who earn a few measly dollars per day doing the Arabs dirty work.
Arabs give orders and expect them to be carried out to the letter. The working class in the UAE may be economically dependent. News flash: the Western employees do not take orders unilaterally.
Tell us what the Arabs know about running Western businesses. They know how to run them into the ground. The Barker Homek issue is an example of the childish way Arabs deal with their dirty laundry. They have the absolute power at home.
WHat they don't know that they should never use it. They misused it in TAQA and now Barker Homek will be millions of dollars richer. Serves them right. Hit them where it hurts, in their egos and wallet.
Here's wishing Peter hits the jackpot.
GO PETER GO!
Dutch Treat
No matter what, people are people. Power intoxicates. Misused power will always come back to haunt.
Too bad they don't even see that. Dubai World will not be the only failure in the UAE.
You are a tree providing shade to the outside.
There are things to be said and those to be known, and only a fool mistakes one for another. Pride is not to be trodden on.
Abdulla, why do you allow this?
Abdulla has no choice. Power has shifted and big changes are still to come.
Big changes is just big talk. The assets are simple and there are only two realistic options for TAQA, to stay the course or sell the assets. Both are troublesome because of the assets, and their age. Nobody will pay the premiums TAQA paid.
My prediction is BIG PAIN as dwindling cash flows force the company to borrow more, and the board continues its charades of a successful company by declaring dividends when the debt status is clearly in the junk category anywhere else in the world. Fantasy Land Abu Dhabi can only provide so much smoke and mirrors until a ponzi scheme-like strategy cracks wide open.
Then Abdullah has the westerners to blame for all. Those lambs are getting their paychecks and meanwhile, they do not know what happens to lambs....they turn into goats very quickly, scapegoats, that is.
Yankee Doodle Dandy
Is plucking weeds in a dessert not a futile endeavour?
The tongue of a dog, no matter how silver the words spoken, is still that of a dog.
May 2011 be a year of prosperity for all who deserve it and may Allah smile upon TAQA and allow it to flourish and grow under the watchfulness of his people.
Abdullah
Any relation with the arrests of ADWEA employees, as reported in The National last week ?
Abdulla, are your sheets whiter than the others?
Taqa bosts a record profit year, when the only $ made was on paper written with red ink. The only real profit will be the bonuses that are paid. I see that PB's fears of fiscal dishonesty continue well after his departure.
disgusted
http://mi.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20110217_0000506.EMI.htm/qx
anyone know any updates? any merit to what pbh said about sheldon, anyway?
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