Michael Fredericks, the founder of Australian Securities Exchange listed Onthehouse, has resigned as chief executive after a legal dispute with one of the original investors in the real estate business.
Fredericks agreed to step down as the chief executive at the request of Onthehouse’s board last week and then resigned yesterday.
Fredericks said he decided to resign “in the best interests of the company and its shareholders” following his dissatisfaction with the actions taken by the board.
Fredericks founded Onthehouse, which now has an annual turnover of $26 million and 160 staff with offices in Brisbane, Sydney and Melbourne.
His share of the business is estimated at $7 million but a bitter personal legal dispute with his former partner and Brisbane lawyer, Phil Heraghty, has cost Fredericks control of his business.
SmartCompany reported on the dispute two weeks ago after the Supreme Court of Queensland ordered Fredericks be removed as trustee of a private investment trust in which Heraghty had invested seed capital in 2007.
Heraghty was one of the first investors in Onthehouse and claimed Fredericks failed to provide him with basic information and accounts since June 2011.
Heraghty also claimed Fredericks took trust money and paid personal credit card debts and banked the funds in a joint account with his wife.
Both Heraghty and Fredericks say the dispute between the pair is now resolved.
Fredericks said in a statement he appreciated Heragthy was “frustrated” by the delay in resolving administrative documentation involving The Fredericks Onthehouse Trust.
“My focus has been squarely on the performance of the Onthehouse company, at the expense of my personal affairs, including my trust holding documents,” he said in a statement.
Fredericks said any suggestion of serious misconduct by him has been corrected.
Heragthy said he was satisfied steps are being taken to bring the trust’s affairs into order.
The Onthehouse board issued a statement to the ASX announcing Fredericks’ resignation and noting the “private civil legal case” had no impact on the financial performance or operations of Onthehouse.
“The board did acknowledge that the matter had caused unnecessary distraction and publicity in relation to the company,” the statement said.
Onthehouse is now searching for a new chief executive.