Doug Hastie - best known to the public as pitchman for his other company, Chanui Tea - has shocked the tech industry by abruptly quitting as chief executive of high-flying technology company Syft, the Christchurch maker of spectrometers that "sniff" air quality.
Hastie's resignation - announced overnight - followed the entrepreneur being rolled as a director at Syft's AGM on Friday, with 50.9 per cent of shareholders voting against his reappointment to the board, and 48.2 per cent in favour (0.9 per cent abstained).
The Herald understands that the largest shareholder, ACC, which holds a 15.8 per cent stake, was behind the power-play, which followed manoeuvrings that saw ACC head of private markets Martin Goldfinch lose his Syft board seat in April last year.
ACC did not immediately respond to a request for comment.
Asked why he thought some shareholders agitated for his removal, Hastie told the Herald, "I don't understand the business reason for it.
"The business remains very strong, even despite Covid."
An update to investors notes Hastie has 11.3m shares or a 15.3 per cent stake in Syft (making him the second-largest shareholder), and that "the Company is not aware whether he intends to sell all or any of hi shares." Hastie told the Herald he had yet to come to a decision.
In June, the privately-held Syft, which is valued on Unlisted at just under $100m, reported FY2020 revenue up more than a third to $30.9m, although profit- crimped by Covid in the final quarter and a restructure to accommodate larger-scale manufacturing - fell from $3.5m last year to $1.2m.
The company is about to move into a new 3000 square metre production facility in Christchurch. At the AGM, shareholders were told the market was volatile but that revenue gains were expected in the year ahead, in part from increasing environmental sector business.
Caught on the hop?
A source close to events tells the Herald that the rest of the board and ACC were caught on the hop by Hastie's decision to quit as CEO.
Chairman Al Monro (ex NextWindow) has been named as acting CEO (Hastie formally leaves on December 31). Monro did not immediately respond to a request for comment.
Small shareholder wants answers
"I have watched the Syft story closely, as I originally assisted Syft to find Doug Hastie," Punakaiki Fund director Lance Wiggs says.
"Doug exceeded anyone's expectations, and Syft' s turnaround is the stuff of legend.
"He is the reason the company and its shareholders have done so well. So it was shocking for me personally - and also as a small shareholder - to see Doug forced off the board, and placed in a position where resigning was the only option," Wiggs says.
"My understanding was that this was also a surprise to Doug, and I would like to understand why those shareholders wanted to remove him. I'd also like to understand what their plan is and whether they have a new CEO in the wings."
Wiggs said while an IPO was always on the cards, he was not aware of any immediate talk of a public listing or that being a point of tension.
Syft was spun out of Canterbury University's commercialisation arm in 2003. It spent the first decade of its life burning through $29m in investors' cash with little to show for it and was down to a handful of staff when Hastie was parachuted in during 2012 to attempt a turnaround.
Tea and scientific instruments have nothing in common by most criteria, but Hastie (who gained an MBA at Yale after graduating Auckland University with an honours degree in engineering) brought the same talent to Syft and Chanui: sales acumen.
At Syft, he found a technically sophisticated product, backed by little or no marketing effort.
Syft's spectrometers were originally conceived with a relatively narrow range of uses, such as monitoring air quality in shipping containers, to detect any spoiled goods.
Today, they're being sold for an array of uses. The South Korean government is using them to measure air quality in cities. And Samsung was Syft's first customer in the semiconductor market, where dust-free air is paramount.
Carmakers including GM and Ford also came onboard, as automakers found Syft's chemical sniffers useful for calibrating cars for different markets - "Westerners like the 'new car smell' but Asian consumers find it offensive," Hastie has said.
The Samsung deal helped bring another chip-making giant onboard last year: Micron, the US semiconductor company that does much of its manufacturing in Taiwan.
Don't expect SMEs to appear on Syft's customer list. Its mass spectrometers sell for six-figure sums.
Profit hasn't tracked up to match revenue. In June, Monro pinned that on re-gearing the company so it has the capacity to fill larger contracts over the past couple of years, particularly with the Micron deal.
"The fast-track to greater scale was painful but, long-term, is hugely beneficial to our business as it has forced us to [be] better on a number of fronts," he said.