VSŽ management, glimpsed through a camera lens at a September 22 shareholder's meeting, kept their jobs.
The meeting had been called by VSŽ shareholder Hutník, which owns a 10% stake in the steel giant. Hutník boss Jaroslav Grúber intended to have VSŽ Preident Gabriel Eichler fired, and to discredit the direction the company was taking in extricating itself from financial troubles.
In the event on September 22, VSŽ's Supervisory Board, chaired by Grúber, expressed its dissatisfaction with the work of the firm's current management, and called for the leadership to be fired. It was the board's last move - immediately afterwards, the entire supervisory board was recalled by a majority shareholder vote.
Named to the new board were Martin Barto, chief of strategy at state bank SLSP, Ladislav Vaškovič, the president of state bank and VSŽ creditor VÚB, Anna Bubeníková from the FNM national privatisation agency, and David Simon, a consultant at ČSOB. Ján Turčan, an economist with Chase Nominees Limited, and Albert Oberhofer alone were re-elected from among the old members of the board.
Shareholders also elected three new people to the Board of Directors, which had been reduced to three members when Ján Drábik, Augustín Valenčík and Sergej Zápotocký resigned at the beginning of August. Elected to the Board were Terence Carter from the auditing firm Ernst &Young, which has done VSŽ's audits for the last three years, and Anton Lukáč and Ladislav Matusák, both currently vice-presidents at VSŽ.
The shareholder group which had rebelled against Eichler's leadership did not take defeat lying down. "I am afraid that the elections of the new members of the supervisory board were rigged," said Grúber, stalking out of the meeting furiously after being fired. According to Grúber, the current VSŽ management had loaded the board with its own people. "We will challenge the validity of this meeting in the courts," he said.
Grúber also rejected allegations that he had been in league with former VSŽ President Alexander Rezeš to recapture control of the firm. "We called this meeting because three members left VSŽ's Board of Directors in August and new members needed to be elected. Apart from that, we wanted to express our disagreement with the policies of the current management, and mainly with those of its president, Gabriel Eichler," Grúber said.
In speeches made at the outset of the meeting, Grúber and Eichler had set out their competing visions for VSŽ. "The company's management doesn't provide enough guarantees for its employees [against lay-offs], hasn't yet come up with a plan for the entrance of a strategic investor, and is giving space to foreign interests to ruin the company," complained Grúber.
Eichler responded with a vow to "continue in the restructuring of the company," a process which should culminate in the entrance of strategic foreign investor.
VSŽ has been in financial crisis since defaulting on a $35 million loan last fall, and only concerted government action convinced the firm's many creditors to agree to a stand-still agreement. Although the agreement has still not been signed, it unofficially requires that VSŽ continue selling off non-core assets and focus on the steel trade.
An apparently satisfied Eichler approached journalists an hour after Grúber's departure to express his appreciation for the support he had received from state shareholders. "I'm just sorry that all shareholders are still not united in their opinions, which makes meetings like this rather awkward," Eichler said.
New supervisory board member Barto said the results of the stormy meeting were compromise that would not satisfy all shareholders, but would maintain the trust of foreign and domestic banks. "VSŽ's current management was confirmed because it has stabilised the company and still has a chance to improve its position," Barto said.
Deputy Prime Minister Ivan Mikoš, Finance Minister Brigita Schmögnerová and Economy Minister Ľudovít Černák, all of whom have taken a close interest in affairs at VSŽ, expressed similar satifaction with the results of the meeting, which they said formed a basis for further growth at the company.
"There is no need to co-operate with people like Grúber and Rezeš, who are only trying to take control of the company," said Mikloš. "Despite yesterday's success, the government cannot fall asleep and must continue in its policies," Schmögnerová added.
While its finances continue in a parlous state, VSŽ's economic results show significant improvement over last year's. The firm's monthly production is now 16% higher than last year's monthly average, while the months of June and July produced a 118 million crown profit. "The growing price of steel, and the growing exports of the company, can only hasten the process of stabilisation at VSŽ," Černák said.