Online casino software developer CryptoLogic Limited has hit back at its former Chief Executive Officer, Javaid Aziz, and is seeking the return of over €1.5 million due to a ‘material breach of various contractual obligations related to his severance from the company’.
Aziz ran CryptoLogic for eleven months before stepping down in February of last year in order to spend more time with his family. He owns four percent of the Dublin-based firm alongside an option to purchase another 3.5 percent of voting rights and petitioned for a seat on the company’s board in January.
In addition to a seat on the board, Aziz stated that CryptoLogic should make cuts to its workforce and management in order to cope with the current global economic climate while simplifying the firm’s legal, tax and management structures by closing its Irish office and reducing the number of its market listings. He also called for ‘immediate write-offs of failed investments or those which do not support the objectives of the 'new' company’.
CryptoLogic rejected these demands and stated that it was already addressing a number of his concerns. It revealed that it had achieved annual operating cost cuts of twelve to fifteen million dollars while restructuring its poker-related operations and expanding its casino business.
Aziz countered by calling for an Extraordinary General Meeting, which was dismissed by CryptoLogic because ‘the requisitions do not relate to shares equalling a minimum of ten percent of the issued and outstanding voting stock of the company’.
The latest move has seen CryptoLogic call for the return of €1.543 held in escrow that would be paid to Aziz in the event that the firm changed control before April 30, 2009.
'While we regret being forced to take this step, CryptoLogic made substantial payments and commitments to Mr Aziz in negotiating his severance and we believe that his failure to adhere to his obligations has been damaging to the company and its shareholders,' said Brian Hadfield, President and Chief Executive Officer for CryptoLogic.
'This action is necessary to protect the interests of the company and its shareholders, which is at all times the sole focus of management and the board.”