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John McGrath has revealed two new directors who will join the board of his struggling listed real estate business McGrath (ASX: MEA) with Peter Lewis and Andrew Robinson tasked with the job of turning the company around.
Lewis is Kerry Stokes's former chief financial officer and he will be the new chairman. Lewis is also a former CFO of Seven Group and Seven West Media. He will be joined by lawyer Andrew Robinson who founded the commercial law firm Robinson Legal in 1982.
"I look forward to working closely with them to restore shareholder wealth and the McGrath business to strong growth," McGrath said in an ASX statement.
John McGrath says the listed company will announce a new corporate plan and senior management structure "in due course".
It's believed that 54-yer-old McGrath has had a change of heart about becoming executive chairman and will take a more hands-on role at the business he founded 30 years ago and will work closely with the group's 95 agencies in marketing and sales.
The two appointments follow a tumultuous two years for McGrath as a listed company which in recent months has been rocked by profit warnings, boardroom and staff exits and media reports that John McGrath has more than $16 million in gambling debts.
Last week the company fell to a $25.5 million first-half loss on the back of a series of earnings downgrades and the ongoing allegations that John McGrath has a $16 million gambling debt.
Shortly after posting the half-year results on Thursday, McGrath went into a trading halt because of "recent media comment in relation to Mr McGrath".
McGrath was forced into writing a letter to the ASX to address the claims which he has denied.He also denied claims that he has been using company money to fund his expensive gambling habit although he admits he has an account with a bookmaker but says the account is not secured by his shares in the company.
The controversy surrounding John McGrath stems from media speculation that McGrath is in debt to gambling company William Hill Australia to the tune of $16.2 million.Further controversy arose when it was alleged that John McGrath has a $100 million lending facility which is allegedly funding his gambling habit.
Shares in the real estate company dived to a record low of $0.42 on Tuesday after three board members resigned from the embattled company. It listed in 2015 at $2.10.
The departures of CEO Cameron Judson, chairman Cass O'Connor and non-executive directors Elizabeth Crouch and Cath Rogers left founder and 26 per cent shareholder John McGrath as the company's only remaining board member until the replacements were officially announced.
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