After a two-year hunt for a new chairman, gaming software giant Playtech ended up appointing Brian Mattingley, former chairman of 888 Holdings as well as the online “footballer stock market” firm Football Index, to the role on 3rd March 2021.
Jason Ader, renowned hedge fund activist and Playtech investor, gave his full endorsement to the appointment of Mattingley, claiming that the incoming chairman was critical to the company’s recovery.
However, considering that Ader has a track record of driving board shake-up to improve corporate governance, maybe he should also be aware of his support for Mattingley this time.
A founder with a complicated background is a hinder to business growth…
Ader certainly has a great eye for investment opportunities. He targets underperforming listed companies and applies pressure on governance to effect changes that boost return for investors through his asset management firm, SpringOwl. One notable example is his leading role in pressing Playtech’s founder Teddy Sagi to bow out of the company.
Back in 2018, after building up a stake in Playtech, Ader called on directors of the company to cut all ties with Sagi because of him. According to the Times, he expressed concerns that Sagi, who has known for insider trading in his early twenties, would constrain shareholder value and hinder the company’s business growth.
Eventually, Sagi sold his remaining shares and concluded his involvement in the company he founded. Ader said that Sagi's exit would expedite Playtech’s licensing process.
The same should hold true when it comes to selecting a chairman
Ironically, Ader seems to have forgotten everything he said in less than three years. In March, he openly welcomed the appointment of Brian Mattingley as the new chairman of Playtech.
‘Brian is a stellar appointment, who is well regarded across the industry. He knows what is at stake for Playtech, and as a chairman will challenge management where necessary,’ he said.
We should not be surprised that Ader did not hold back his praises for Mattingley. It is reported that those two have known each other since 2015, when Mattingley led 888 Holdings’s pursuit to acquire bwin.party Digital Entertainment, where Ader was a large shareholder. They must have somehow built a meaningful friendship thereafter.
Yet, with just a little bit of research, anyone will find out that Mattingley also has a ‘colourful past’ – he is one of the culprits or at least an accomplice of the recent Football Index disaster, which has left tens of thousands of football fans with a staggering collective loss of nearly £90 million.
Some critics argue that the business model of Football Index was akin to a Ponzi or pyramid scheme right from the outset. As the chairman of Football Index between 2018-2020, how could Mattingley claim that he ‘was not aware of any issue with the company’ when asked for an explanation after the collapse of the online “footballer stock market” platform?
As an influential leader, he should have been able to notice something went wrong in Football Index and fulfilled his role by ‘challenging the management where necessary’ to ensure that the company was acting responsibly, ethically and sustainably. It is by no means acceptable for him to just shirk responsibility and walk away.
Look at what happened to Football Index. With its operating licence suspended recently, the past promising giant is now one of the greatest disappointments in British gaming industry. So if Playtech directors turned their back on Sagi because of a misconduct he committed in his early twenties, they should do the same to Mattingley, who also has a controversial past that may potentially ‘constrain shareholder value and hinder the company’s American ambitions’ like what Ader said over two years ago.
Do the Right Thing
Don’t get that wrong. It’s not here to redress the grievance for Sagi. It is completely agreed with Playtech’s decision to make a clean break with him. It was wise of the company to get rid of a stakeholder who has failed to meet its expected standard of probity.
Yet the same goes for a chairman with doubtful integrity. Now, the Football Index incidence has showed the public that Mattingley does not have the required competence or ethical values to serve as chairman. Overlooking his close involvement in the scandal could badly damage the reputation and commercial credibility of Playtech, let alone any benefit he could bring to the company’s recovery.
In a world that increasingly values responsible business conducts, Playtech had better explain why it holds such apparent double standard and eventually do the right thing.