Super Retail Group has sensationally dumped its chief executive officer after new information about a relationship he had with a co-worker came to light.
The company behind popular big-box retail brands Rebel, Supercheap Auto, BCF, and Macpac told investors on Tuesday that Anthony Heraghty’s termination had been made with immediate effect. “The board made this decision after receiving new information from Mr Heraghty regarding his relationship with the company’s former chief human resources officer,” the company said.
“In light of this new information, the board has concluded Mr Heraghty’s prior disclosures were not satisfactory.”
Statement from the company
The board offered no details on what new information about the relationship prompted its immediate dismissal of the recently divorced chief executive officer.
The dramatic move comes amid a long-running court feud between SRG and two former employees who claim Mr Anthony Heraghty’s relationship with former HR boss Jane Kelly created a toxic workplace environment.
The board had previously defended Mr Heraghty against allegations that an illicit affair had taken place, as well as claims of bullying and a toxic culture.
Investors held off an immediate mass exodus amid the fresh wave of chaos at the top of the company in early trade, with the stock down just 2 per cent to $16.93.
SRG said it had also “exercised its discretion” to lapse Mr Heraghty’s incentives, which include all unvested stock incentives and vested but unexercised rights.
Chief financial officer David Burns has been appointed interim boss while the company starts a search for Mr Heraghty’s replacement.
Federal Court documents last year alleged Mr Heraghty had an illicit affair with Ms Kelly that created a toxic culture within the $3 billion listed company.
The court papers revealed allegations of an “unhealthy culture” that developed as a result of Mr Heraghty and Ms Kelly’s alleged conduct, with SRG’s former chair, Sally Pitkin, also heavily criticised.
A statement of claim lodged by SRG’s former chief legal officer and company secretary, Rebecca Farrell, alleged staff did not feel they could report concerns about a culture of bullying to the board.
This was because Ms Pitkin “is very close to the CEO and Ms Kelly, and they feel chair Pitkin would somehow sweep such matters under the carpet”.
SRG staff who reported to or worked with Ms Farrell on several occasions from about May 2021 also made disclosures that they were under pressure and unable to do all aspects of their work, the documents said.
This caused them stress and risks to their health and safety, it is alleged.
SRG, earlier this year, delivered its defence to the claims that contradicted Ms Farrell’s allegations.
The case is due to return to court later this month.
Super Retail Group Facing Legal Proceedings
The company warned in April last year that it was expecting legal proceedings to be filed by two workers and flagged anticipated losses and damages of between $30 million and $50 million.
The claims centred on claims that the relationship between Mr Heraghty and Ms Kelly was not disclosed, inappropriate company travel, and bullying.
It also made allegations of victimisation and adverse treatment, particularly against employees in the corporate team who had unreasonable workloads, insufficient resources, and restricted access to information, and unsatisfactory company record management.
At the time, SRG said the board had conducted a review and investigations into these allegations.
“The board was supported by independent external advisers. The board’s review and investigations concluded that none of the allegations are substantiated.”
SRG
E&P Financial Group retail analyst Kade Madigan said he was surprised by the timing of Mr Heraghty’s termination, given how long it had been since the board’s investigations were initiated. “Regarding the ongoing court cases, we note many subpoenas had been filed on September 10 and 11, with the court scheduled to re-adjourn on September 24,” Mr Madigan said.
“We had previously anticipated that SRG would host an investor day later in CY25 to update the market with a refreshed longer-term strategy. We would expect this will still occur; however, the timing will now be dependent upon the appointment of a new long-term CEO.”
Mr Madigan
Mr Heraghty has been managing director since April 2015, and was given the additional title of CEO in February 2019.
SRG last month posted record annual revenue of $4.1 billion in the year ended June 28, up 4.5 per cent from a year ago, from its network of 782 stores. But statutory net profit slumped 8 per cent from a year earlier, coming in at $222m.
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