New Tel claims Martino's scalp
By Fran Spencer
DELOITTE Touche Tohmatsu Australian chief executive Domenic Martino has fallen on his sword amid controversy over his ties with collapsed Perth junior telco New Tel.
In a statement yesterday, Deloitte said Mr Martino - a former director of New Tel and friend of its former head Peter Malone - had stepped down from the chief executive position at the big four accounting firm and taken leave "to consider his future".
The resignation brings a sudden end to what had been a steady rise of the Perth-born Mr Martino at Deloitte, which he joined in 1994 by leading the Perth practice of second-tier firm BDO Nelson Parkhill in a merger with the first-tier firm.
Deloitte said Mr Martino had cited the continuing publicity associated with his past directorship of New Tel as a reason for his departure.
According to Deloitte, Mr Martino had also cited his belief it was good corporate governance and in the best interests of Deloitte and its people for him to step aside while New Tel's affairs were investigated, which could take several years.
"Mr Martino believes firmly that any future investigation of New Tel will demonstrate that he properly fulfilled his duties as a director until he resigned in February 2002, 11 months before New Tel went into liquidation," Deloitte said.
Despite his resignation from the New Tel board early last year, speculation arose that Mr Martino could be a target in insolvency actions after New Tel's then-administrator, Phil Carter, said a liquidator could bring actions against individuals "who had been acting in the capacity of director".
Mr Carter has said that investigations by the Australian Securities & Investments Commission had indicated New Tel could have been trading while insolvent from as far back as December 2001 - a year before administrators were called in and two months before Mr Martino's resignation from the board.
Recent media reports have also suggested Mr Martino received free mobile phones and network time from New Tel, which continued after his resignation from the board.
Mr Martino was appointed Deloitte Australian chief executive in May 2001 and, as a member of its global executive committee, had championed a corporate culture aimed at aggressive growth and involvement of partners in corporate activities.
News of Mr Martino's departure came as Deloitte's Lynn Odland, who stepped down as chairman to replace Mr Martino in the chief executive's role yesterday, banned partners and employees of the global accounting firm from holding directorships in public companies.
Mr Odland, Deloitte chief executive for four years before Mr Martino's appointment, said holding directorships had been accepted practice in Australia but "changing market attitudes towards corporate governance" dictated a change in policy.
Mr Odland yesterday denied Mr Martino had been pressured to resign. "I would say that in big picture terms, no . . . the firm doesn't like that kind of publicity but neither does Domenic," he said.
"I have a huge amount of respect for Domenic, he didn't want the firm to suffer from any of these innuendos being flung around New Tel and therefore thought it was better to resign."
However, he conceded the issue had been discussed before Mr Martino's resignation.
"I'm the chairman and he's the CEO, so we have had discussions - I wouldn't try to say we hadn't," Mr Odland said.
It is not yet known whether Mr Martino plans to resign from the partnership at Deloitte, with Mr Odland saying he planned to take time to "clear his head".
He did not think the firm had any plans to ask for Mr Martino's resignation.
© 2003 West Australian Newspapers Limited
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