RadiumOne’s New CEO’s Memo on Chahal Firing: “We Cannot Know for Certain What Gurbaksh Will Do”
Here’s a memo that new RadiumOne CEO Bill Lonergan sent out late last night to the employees of the advertising tech company in the wake of the firing of Gurbaksh Chahal, its founder and CEO.
As is well known, the dismissal was due to the pressure on the company after he pleaded guilty to two misdemeanors of battery and domestic violence, after being charged in San Francisco with 45 other felony counts related to the beating of his girlfriend. A video — which has been sealed by the court — allegedly showing that attack was thrown out due to issues around its seizure.
Since he was fired over the weekend by the remaining directors, Chahal has been on a tear on social media, accusing the board of encouraging him to plead guilty and then betraying him, among other things.
Now the new leader, Lonergan, is responding firmly, after an all-hands meeting with staff.
It is, unlike many internal memos I have had obtained, chock full of information, including whether Chahal will take legal action against RadiumOne (“We do not believe he has any legitimate claims …”), whether there will still be an IPO (probably) and did the board encourage Chahal to take the plea as he claimed in a blog post (“Gurbaksh and only Gurbaksh made the final decision on whether to accept the plea agreement”).
It also, as I had previously reported, confirmed that the board had asked Chahal to step down voluntarily, which he declined to do.
And, of course, why did it take the board so long to fire him? I’ll quote that important one in its entirety:
“The board moved as decisively as it could given the complexities involved. A person is innocent until proven guilty. Given recent developments, it became clear that Gurbaksh’s ability to lead the company had been severely compromised by the legal proceedings and ensuing developments. The Board asked Gurbaksh to voluntarily tender his resignation in the best interests of the company. When it was clear that Gurbaksh did not intend to resign as CEO and Chairman, the board called a special meeting to terminate his employment.”
From: Bill Lonergan
Date: Mon, Apr 28, 2014 at 10:59 PM
Subject: Follow up from All Hands meetings
I have now been able to connect with most of you, around the world, to talk through the events of the last week. I wanted to follow-up and address a few questions that were sent to me following our All Hands meetings today. I have aggregated and summarized the main questions below:
What legal actions could Gurbaksh take against the company that could expose us to a period of prolonged uncertainty?
We cannot know for certain what Gurbaksh will do, and certainly hope he will take no action that hurts or distracts the company. We do not believe he has any legitimate claims against the company, and we are therefore confident that the company would prevail against such claims.
How will the company be able to move forward with Gurbaksh retaining his seat on the board?
The company will remain fully functional even with Gurbaksh on the board. He has no executive authority and because of the composition of the Board Gurbaksh cannot impact any decisions affecting the business.
Why did it take the board so long to terminate Gurbaksh’s employment as CEO and Chairman?
The board moved as decisively as it could given the complexities involved. A person is innocent until proven guilty. Given recent developments, it became clear that Gurbaksh’s ability to lead the company had been severely compromised by the legal proceedings and ensuing developments. The Board asked Gurbaksh to voluntarily tender his resignation in the best interests of the company. When it was clear that Gurbaksh did not intend to resign as CEO and Chairman, the board called a special meeting to terminate his employment.
We’ve seen an email from a board member on Gurbaksh’s blog that suggests the board was supportive of Gurbaksh. Isn’t this at odds with terminating his employment?
The email paraphrased on Gurbaksh’s blog was in fact sent, but was taken out of context. The communication was an effort to discourage Gurbaksh from hurting himself by talking with the media.
Gurbaksh has also suggested that the board influenced him to accept the plea deal with the district attorney. Is that true?
Gurbaksh and only Gurbaksh made the final decision on whether to accept the plea agreement. He asked many people for their advice and opinions and the board offered that an outcome which prevented prolonged court proceedings might be in the best interests of the company but it never pressured him into that course of action. Gurbaksh was represented by very competent legal counsel. We must assume that Gurbaksh made the decision he did because he thought that was the best outcome.
Some of you have also asked about the allegations made by Rafael Rojas and, specifically, if management turned a blind eye to allegations of illegal and unscrupulous activities by Gurbaksh.
For reasons that we hope you can respect, Rafael Rojas’ employment with the company, and the reasons for his separation, are private personnel matters and we are not in a position to comment on these matters. The company believes that at all times it acted responsibly and in the best interests of the company.
Are we still going to do an IPO?
Many of you have asked me about our plans for an IPO. It is very straightforward right now, our primary focus is on continuing to grow our business as fast as possible whilst remaining profitable. In that way we preserve our optionality on the timing of an IPO.
I know this has been a difficult time for all of you, and I appreciate your patience and support. I am always available to take any additional questions you may have and encourage you to call me no matter how small the concern. Thank you for all the notes of support I have received over the last few days. I am very proud to be your CEO and I look forward to working with each and every one of you.
William B. Lonergan | Chief Executive Officer