Shareholder Sir Stelios Publicly Challenges Fastjet

Stelios Haji-Ioannou, founder of EasyJet Plc, poses for a photograph in London, U.K., on Friday, June 18, 2010. Stelios said heÕll call an emergency shareholder meeting in an effort to cut executive pay. Photographer: Chris Ratcliffe/Bloomberg *** Local Caption *** Stelios Haji-Ioannou

Sir Stelios Haji-Ioannou, EasyJet boss and major shareholder of African budget carrier Fastjet, has called for clarity, transparency and accountability from Fastjet’s board.

The dispute between African low-cost carrier Fastjet and its co-founder, EasyJet boss Sir Stelios Haji-Ioannou, has escalated considerably over the past week.

Late last month, Sir Stelios called for the dismissal of Ed Winter, Fastjet’s chief executive, and general counsel Krista Bates, another senior member of the carrier’s board. Sir Stelios also cited grave concerns over Fastjet’s financials.

In an excerpt from a letter to Fastjet chairman Colin Child, published in The Guardian, Sir Stelios wrote, “The company has a ridiculously high cost base … We believe the company will run out of cash sometime in 2016. We now have about six months left to steady this ship. Time is of the essence.”

Fastjet has called the publication of this correspondence “inappropriate” and has said that it is now seeking legal counsel. In light of this turmoil, the Tanzania-based carrier’s share has plummeted. Both Bates and Winter have left the company, in which EasyJet holds a 12.6 percent stake.

Late last week, EasyGroup Holdings, the company which controls EasyJet, released another letter written by Sir Stelios to the Fastjet board. According to City A.M., this correspondence demanded that Fastjet resume the publication of passenger stats “as a matter of urgency” and called for updated cash flow forecasts. The letter also claimed that the African carrier had “potentially committed a breach of the current brand license that exists between FastJet and EasyGroup Holdings.”

In response, Fastjet said that it “cannot understand why EasyGroup … has published this particular letter without first raising its concerns with the company.” It added that it “holds EasyGroup responsible for any damage caused to the business by the publication of this letter.”

In a final rebuttal, EasyGroup replied that a “breach of a brand license agreement is a very serious legal matter … Colin Child should be taking proper legal advice with a view to complying with the agreement without trying to cover the matter … as brand owners, EasyGroup is concerned to protect brand customers as well as its reputation … other shareholders should be putting pressure on Colin Child to cut costs and resume publication of the passenger statistics.”

[Photo Bloomberg via Getty Images]