Alan Knott-Craig Jnr unexpectedly stepped down as Mxit CEO and World of Avatar CEO on 18 October, citing differences between himself and his shareholders. More information has now emerged about Knott-Craig’s departure.
Last week Knott-Craig said in a press statement that “while the shareholders and I share the same vision, we differ on how to get there. Therefore, I agreed to go my own way.”
The main conflict seems to be between Knott-Craig and one of the company’s largest shareholders Paul Harris.
According to a well placed source Harris lost faith in Knott-Craig to lead Mxit, and said that either his shares should be bought out or Knott-Craig should step down as CEO. The outcome was that Knott-Craig had to step down after shareholders agreed to invest more money into the business.
A Business Times report also said that “Paul Harris was unhappy with Mr Knott-Craig’s performance and style and was only prepared to invest his share of R100m — which shareholders are ploughing into the company — if the CEO resigned”.
According to two independent sources Knott-Craig’s performance was at the centre of the conflict between Mxit CEO and Harris.
Mxit’s lackluster financial performance, and its battle to grow amidst stiff competition from competing platforms like BlackBerry Messenger and WhatsApp are rumoured to have played a part in Harris’ decision.
There were also suggestions that Mxit’s true user numbers were not the same as the 10 million claimed South African users.
Mxit told BusinessTech last week that their “monthly active user number moves up and down between 9.3 million and 10 million”. However, an industry insider places the number of active Mxit users in South Africa at closer to five million.
Questions have also been raised about World of Avatar and Mxit’s acquisition streak – partly because these businesses are not generating much revenue and profit.
Francois Swart, the current CFO, will act as the interim CEO. Mxit will be recruiting a new CEO and other new executives to drive expansion at the company.
Mxit was asked for feedback about these issues, but the company said that neither it, nor the role-players (Knott-Craig and Harris) would like to comment.
This article first appeared on mybroadband.co.za