TPG to end ‘country club’ culture

The final step in TPG Telecom’s takeover of iiNet is due to happen today, when iiNet shareholders will be paid $9.55 per share, however, staff and customers face an uncertain future.

Sydney-based TPG gained effective control of iiNet on August 24, when four incumbent directors resigned from the telco’s board and three TPG nominees were appointed.

Michael Smith and David Grant were the only previous directors to have remained on the board, and they are expected to resign once payments to iiNet shareholders have been made.

The first two weeks of TPG control have been a tumultuous period for iiNet, marked by the surprise departure of chief executive David Buckingham.

Speculation is swirling about further changes to the executive team, its operations, its marketing and brand.

TPG executive chairman David Teoh, renowned for his no-frills, low-cost approach to business, is believed to have told iiNet staff that he will bring an end to what he calls the company’s “country club” culture.

Business News has been told Mr Teoh finds it strange that so many iiNet staff members are friends and chat so amicably at work

Mr Teoh, who is TPG’s controlling shareholder with a 36.7 per cent stake, is quickly putting his stamp on iiNet.

His son, Shane Teoh – who has been a non-executive director at TPG since 2012 – is one of three TPG nominees on the iiNet board; it’s understood he has been appointed iiNet’s chief financial officer.

However, many staff are believed to be facing uncertainty about their reporting lines and areas of responsibility.

iiNet has also stopped selling the Fetch TV subscription service.

The changes over the past fortnight follow a good deal of debate during the $1.4 billion takeover about whether TPG would be able to maintain iiNet’s brand values.

TPG sought to assuage those concerns in May.

“TPG recognises that the value of the iiNet brand is a product of the high levels of customer service provided by iiNet staff and intends to preserve and foster that key strength,” TPG said in a statement.

Combined with an increase in its takeover offer, the deal won backing from 95 per cent of iiNet shareholders when put to a vote. 

iiNet has about 700 staff at its Subiaco headquarters, most of whom work in its call centre.

It also has call centres in Auckland, Cape Town and in the eastern states, allowing staff to work normal, daylight hours but ensuring customers have 24-hour coverage.

In contrast, TPG has call centres in Malaysia and the Philippines.

TPG and iiNet were contacted for comment.

TPG announced on Monday afternoon it had paid cash and issued 23.2 million shares to former iiNet shareholders, as consideration under the scheme of arrangement.

The former iiNet shareholders will collectively have a small stake in TPG, which has a total of 817 million shares on issue.