Wallace walks from Cable & Wireless
Published: 21 Jan 2003 14:56 GMT
Graham Wallace chief executive of troubled telecoms firm Cable & Wireless is to leave the company.
The announcement comes 10 days after Richard Lapthorne, the former chairman of healthcare firm Amersham and former British Aerospace finance director, was appointed chairman of the group. Shareholders welcomed Lapthorne's accession; C&W stock jumped 42 percent after his arrival, adding £477m to market value.
Lapthorne and Wallace agreed that Wallace's position at the telecom group had become unsustainable given the intense shareholder dismay at his continued stewardship.
Wallace, 54, joined C&W in February 1998, having previously run Granada's motorway service stations division. He was behind the C&W Global's ill-fated attempt to become a major carrier of Internet traffic. Although Internet traffic boomed, C&W was unable to compete on price. In 2002 C&W shares lost 87 percent of their value, forcing it out of the the FTSE 100 index.
During Wallace's tenure C&W experienced an expensive list of disasters including: £5bn spent on now almost worthless Internet ventures, mainly in the US; £1.5bn to cover a potential tax liability on sale of One2One to Deutsche Telekom; £800m to cover property leases; and 3,500 job cuts in 2002.
Wallace will be leaving as soon as a successor can be appointed and will remain responsible for day-to-day operations. Wallace could collect a redundancy of up to £2m -- C&W said the terms of his departure had yet to be negotiated.
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