Junkee managing director Piers Grove has agreed to step away from the youth media company and sell his stake to David Haslingden’s RACAT Group, following an investigation by Crikey into dysfunction and fears of financial insecurity since the pair purchased Junkee Media in December last year.
The pair released a statement saying they had come to a financial agreement to settle over Grove’s $1.2 million loan to the company that had converted into equity, according to The Sydney Morning Herald.
“Junkee was purchased by Scout Publishing, a joint venture between Piers Grove and RACAT Group. Both Mr Grove and RACAT financed the purchase and operations, in the form of loans convertible into equity,“ the statement said.
“The $1.2m was paid by Mr Grove as a convertible loan. Mr Grove has now offered to sell his interests in Scout to RACAT. The outcome has been mutually agreed by both parties who are confident of completing this in the next month.”
Earlier this week, Crikey reported on the internal turmoil that had followed RACAT Group’s purchase of Junkee Media.
Former and current employees told Crikey that their optimism about the takeover soon turned into disillusionment and dysfunction following senior staff redundancies, Grove suffering a stroke and then never returning from leave, a threat to sue to reclaim the $1.2 million loan, and a mass exodus of staff.
Staff who spoke to Crikey today said they had been kept in the dark about the decision reached by Grove and Haslingden. They also said that management had seemed more focused on finding out who spoke to Crikey rather than addressing any of the concerns raised in the investigation.
Haslingden directed Crikey to the shared statement. Grove did not immediately respond to a request for comment.
