CryptoLogic War of Words Continues 

Ex CEO Javaid Aziz Goes on the Attack as CryptoLogic Release Quarter Two Results

Javaid Aziz, who held the role of CryptoLogic CEO from April 2007 to February 2008, has welcomed the resignation of Brian Hadfield who has left the company in the wake of the $13m second quarter losses announced yesterday (more).

Mr. Aziz (pictured) has written to Mr. Hadfield and expressed his delight with his resignation, but called him a coward for not calling a shareholder conference call to announce his decision.

Mr Aziz wrote: "You were never fit to be the CEO in the first instance...... The financial actions being taken today should have been taken in January 2009, go read my letter dated 9th January 2009 again.

For all the misery you have caused to the employees (and their families) and shareholders of Cryptologic I hope you rot in hell."

In March of this year,  the company released its full 2009 results (more). Despite being well into the first quarter of 2010, which saw the company make substantial losses, Mr. Hadfield claimed it had been a tough year, but could see brighter times ahead in 2010.

In May of 2010, having read the company's first quarter results, Mr. Aziz wrote "Frankly, it is an unmitigated disaster and a disgraceful performance, for which you are wholly responsible.
 
Let me give you nine* reasons why in my opinion you should resign immediately as the CEO of Cryptologic:
 
1) You have presided over eight consecutive quarters of significant revenue decline, operating losses and major cash burn. There is no credible plan for a recovery. You have trashed the company and lost the confidence of the shareholders.
 
2) You have destroyed shareholder value on an unprecedented scale and have shrunk the market capitalisation of Cryptologic by approximately 90%.
 
9) You pay yourself a fixed salary with no variable element and have buffered yourself from any downturn or adverse conditions.

You are not fit to be the CEO of a publicly listed company as you are unprofessional in your approach to business, lack the ability to focus and execute on issues that matter...."

In another email sent to the Chairman and now interim CEO, David Gavagan in November 2009, Mr Aziz implies the CEO (Mr. Hadfield) and CFO (Steve Taylor, who has since left the company and his position filled by Huw Spiers) do not command the respect and confidence of the shareholders and investor public, and urges Mr. Gavagan and Tom Byrne to be pro-active by dismissing both and recruiting a new CEO and CFO who can turn round the CryptoLogic fortunes.

Since Mr. Taylor and Mr. Hadfield have now departed CryptoLogic, IrishDev.com asked Mr Aziz, a substantial shareholder in the company, if he now thought that Mr. Gavagan and Mr. Spiers can turn around the fortunes of this company.

Mr. Aziz replied: "I was initially pro the appointment of Mr. Gavagan in May 2009 because an independent Chairman should have enabled Cryptologic to fully maximise shareholder value. In November 2009, in light of devastating comments made by the shareholders about the company's third quarter 2009 financial results, I called upon Mr. Gavagan to take action in respect of his CEO and CFO and it has taken nine months for this to happen. Unfortunately, the delay has meant dire consequences for the company's performance and the CryptoLogic shareholders."

Clearly, there is no love lost between Mr. Aziz and Mr. Hadfield, and now Mr. Hadfield is no longer CEO it remains to be seen if Mr Aziz relents in his pressure on the CryptoLogic board. But judging by Mr. Aziz's final comment, Mr. Gavagan should probably expect a large thorn in his side whilst CryptoLogic continues to flounder.

"Gavagan is a failed private equity guy who has presided over a few belly ups and has no experience of the gaming market. In my opinion, he could have and should have acted in 2009."

IrishDev.com asked the CryptoLogic board to respond to Mr Aziz's comments. A spokesperson replied ".... the company is not saying anything beyond what is in the release (more)."

(*Points 3-8 of Mr. Aziz's email have been withheld at this time for legal reasons.)

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