Case study two: Wake up and smell the coffee
"I didn't even want to be a director. I just wanted the Plymouth franchise." So says Steve Bartlett, a private shareholder who became chief executive of café chain Coffee Republic in October 2006 after a protracted boardroom battle.
"I already ran a Subway and Wimpey franchise in Plymouth, so I applied for a Coffee Republic franchise, too," he explains. "I liked the company, and I've always dabbled in the stock market, so I bought 1m shares for £11,000. But then they stopped me from becoming a franchisee because they didn't like shareholders to do so."
Questioning the management's stance, Mr Bartlett probed further into the loss-making company's financial records and became concerned about the way the business was being run, and high levels of director remuneration. He then set up a hotmail e-mail address, and started posting messages on ADVFN, a website for private investors.
"The responses flooded in from disgruntled small shareholders, but the sheer number of people contacting me made it a full-time job," Mr Bartlett recalls. He then obtained the shareholders' register, and sent out letters to garner support for an EGM. Fellow shareholder and experienced businessman Peter Breach instructed a solicitor to guide them through the process. With 25 per cent of the share capital between them, and support from the company's small investors, Coffee Republic's executive chairman and founder, Bobby Hashemi, decided to step down. Mr Breach became chairman, and Mr Bartlett the chief executive.
"We hope the company will go cash-positive very soon," says Mr Bartlett, who has signed deals to install outlets in Travelodge hotels, Greene King pubs and motorway service stations, as well as launching an international franchise operation.
"Any company out there that is underperforming, and underestimates its ragbag of small shareholders - you better watch out."
Source: http://www.investorschronicle.co.uk/InvestmentGuides/Shares/article/20080402/5657c004-fff0-11dc-b9f5-0015171400aa/Small-shareholders-Advice--case-studies.jsp
