Finbarr Power, the suspended boss of on-line hotel booker, CNG Travel, resigned yesterday as it emerged that he was a likely bidder for one of the group's loss-making businesses.
It was revealed earlier this week that the company had suspended Mr Power, who founded the business and led its flotation on London's Alternative Investment Market (AIM) last year.
Yesterday, it issued a statement at its annual general meeting (agm) in Dublin saying that he had resigned to pursue other interests, including the possible purchase of CNG's loss-making leisure business, which it placed on the market last week.
Speaking after the meeting, chairman Luke Mooney confirmed that the board suspended Mr Power last Friday, after he expressed interest in buying its leisure business, US firm Places to Stay, which it bought last August for €10 million.
"I told him that I would have to suspend him formally," Mr Mooney said yesterday. "You cannot play both sides in these situations."
Mr Power agreed, and then subsequently decided to leave the company. Mr Mooney said that both sides had agreed terms for his departure, but said it was not prepared to release details of them at this stage. However, they will be made public in its annual accounts for the year.
The board appointed PJ King, the company's chief operating officer, as acting chief executive until it finds a replacement for Mr Power.
Mr King said yesterday that it it had a significant number of approaches regarding the purchase of Places To Stay. However, he said he was not prepared to speculate on whether a sale would recover the €10 million that CNG spent on the business 10 months ago.
Earlier, the board indicated that it believed it was unlikely to recover a $9.3 million (€7.7 million) loan which it gave to US company, Around the World Travel in 2002, in connection with what CNG's describe as a "potential business combination". Last year, CNG waived the loan, given to Around the World subsidiaries, Traveleaders and Seaway Two, in return for a $5 million promissory note from a third company, GCD Acquisition, which is payable in February 2009.
The board did not believe that it should recognise the value of the note in CNG's accounts until it received the cash.
However, directors yesterday conceded that the board believes there is a question mark over its ability to recover the $5 million.
During the meeting, UK-based shareholder Brian Pearse, accused the board of being deliberately evasive about the loan, which is detailed in the notes to CNG's 2004 accounts.
At Mr Pearse's urging, a majority of those who attended the meeting refused to approve the accounts for 2004.
But the board was able to rely on 22.5 million proxies to pass the motion.
It also relied on the proxies when a number of shareholders voted against the re-election of Séamus Ross junior as a director.
