re: Gemplus Internal
>> Gemplus Does it Again
Anoop Ubhey
Smart Card Industry Analyst
Frost & Sullivan
16 August 2002
2001 was a struggle for the smart card market and it comes as no surprise this hit Gemplus very hard financially. Despite this, the French smart card manufacturer remained in the number one spot for revenue and market value in terms of market share in the smart card market with a staggering 27.8 percent. I believe this shows the understanding of market conditions and the expertise and flexibility to re-focus to the changing market needs.
Despite this, other things went on internally and the departure of Marc Lassus and Antonio Perez from their positions is well documented. Just days ago Gemplus announced that it is unlikely that a new Chief Operating Officer (CEO) will be named until the end of the month. Looking at the year so far in 2002, it would not be a surprise to me if this date gets pushed back further. Another question which might spring to mind is why not keep Ron Mackintosh (the guy who has been brought in for the interim period) to stay on and fulfil the responsibilities of a full time CEO? I guess the simple answer to that question is Marc Lassus.
The story of Gemplus after Antonio Perez was the appointment of Ron Mackintosh. Now he was only appointed as an interim chief executive. There has been a lot of internal trouble on the board, differing opinions and the recent holiday period has forced the Company to push back the announcement back. I believe the board can not come to an agreement on who should be the successor. Ron Mackintosh was asked to fill in for eight months, in which time a new choice would have been made. It is believed that Mr Mackintosh placed his own name forward to become the permanent CEO for Gemplus but he came up against the mighty Marc Lassus and Co from the board. Mr Lassus is also a major shareholder in the company. Mr Mackintosh also has many contacts in the largest shareholder, US based Texas Pacific Group. Now this Group was responsible for the demise of Marc Lassus last December (his removal from Chairman). So it is quite clear that there is a history and an ugly mess that Gemplus needs to address to really get the Company moving forward.
Attempts have been made to make Mr Lassus look bad on the board. In July it was confirmed in writing that Gemplus had granted €67 million in loans to Mr Lassus in 2000. The loans come due at the end of next year and when asked about the timing of the write-down announcement. Now whether Mr Lassus pays them or not is another question, but this whole 'web' has been brought to the eyes of the board to try and weaken Mr Lassus' position, and I believe it might have the desired effect.
As a whole, Gemplus managed to stage off any real threats, it has kept its number one position in the market. SchlumbergerSema has managed to claw away at its market leadership, in terms of the number of smart card shipped in 2001. If Gemplus stays in this turmoil, I would not be surprised to see a different outcome this year. However, there is time for the Company to turn things around and set off in the right direction. <<
- Eric - |
