TPG founder resigns
In 1992, David Teoh and his wife founded TPG Telecom. In March of this year, however, the telecom billionaire executive resigned.
This comes after TPG, alongside Vodafone Hutchinson Australia, battled with the ACCC over a proposed $15 billion merger. The ACCC went against both telcos, arguing that the merger will ruin competition in the telco sector. But last year, a federal judge approved the merger, and the newly merged TPG Telecom became the third largest telco in the country.
So why then, after accomplishing such a feat, has David Theo stepped down? It’s difficult to say with certainty. However, the billionaire still holds some sway with the telco regardless of his exit.
Effects of David Teoh’s exit
So far, reactions to David Teoh’s sudden exit haven’t been good. The day after the resignation, shares tanked 6.7 percent to their lowest in 8 months.
After the TPG-Vodafone merger, TPG Telecom’s worth is now $12.9 billion. However, David Teoh owns 17.2 percent of the company despite his departure – one of the largest chunks amongst shareholders.
If the former chairman were to sell his shares, it’s difficult to predict how that would impact TPG Telecom. However, speculations aren’t necessary at this point – Mr. Teoh can’t sell until July 2022.
Meanwhile, TPG is certainly missing out on who is widely seen as the driving force behind the telco. While David Teoh has stayed out of the limelight for decades, he has orchestrated most of the company’s star moments, including the recent merger with Vodafone. With such a significant pillar walking out so suddenly, TPG could have some difficult times adapting to the new atmosphere.
Events leading up to David Teoh’s resignation from TPG could explain why
David Teoh hasn’t given any concrete reasons for stepping down. He has only stated that it felt like the “right time… to hand over the reins and focus on other interests”. But there may be some underlying reasons behind the billionaire’s departure, considering his son, Shane Teoh, has also resigned.
The significance of Shane Teoh’s resignation lies in the fact of the timing. In early March (the same month David Teoh and his son stepped down), Shane Teoh was convicted of assaulting an Uber driver.
In response, TPG Telecom announced that they were looking into the matter. A TPG Telecom spokesperson said, “We are aware of this matter. The TPG Telecom board will consider the implications of this matter. TPG Telecom does not condone discriminatory or violent behaviour”.
Perhaps one could speculate that Shane Teoh’s conviction played a role in both his and David Teoh’s resignation. However, nothing is certain.
Canning Fok will take over TPG Telecom
David Teoh believes he has left TPG Telecom in good hands. The telco will be led by Vodafone Hutchinson Australia’s former chairman, Canning Fok.
However, this doesn’t mean TPG Telecom will take a different direction – not anytime soon anyway. While Mr. Teoh has stepped down, his longstanding views will likely remain with TPG for a while.
In fact, the new chair Canning Fok said it best: David Teoh “…has driven significant change in the Australian market and has carved out a position which TPG Telecom will build on”.
Final words – What’s next for David Teoh?
While David Teoh has resigned from TPG Telecom, there’s a great chance he will remain involved in the telco’s future.
Another son of Mr. Teoh, Jack Teoh, has been appointed by the board as a non-executive director of TPG Telecom. Tony Moffatt, the current TPG company secretary, has also been appointed as a non-executive director. Both are in David Teoh’s circle and are taking over the vacancies of his and Shane Teoh’s resignations, giving the former chairman enough ongoing influence.
Also, David Teoh still holds 17.2 percent of the company – a significant chunk. He can choose to hold on to this and the influence that comes with it, or sell it next year – which would likely have an effect on the company as well.
There has been speculation that David Teoh might also privatise Tua, Singapore’s arm of TPG Telecom which separated from TPG Telecom after last year’s merger with Vodafone.