Local press is speculating that the BoD changes due to take place in the December EGM will include CEO Elek Straub's resignation. It is hinted that either János Winkler (TMH Head) or György Simó (T-Online Head) could be appointed as the new CEO. The press speculates that the 2005 accounts will finally get the sign-off from the auditors, paving the way for Straub's departure, following a lengthy legal investigation into certain contracts in Montenegro.
Our view: We believe that the CEO's departure is already discounted in the share price, and would expect a negative reaction from the markets if the CEO stays. We believe that wider management changes are needed to re-establish credibility within the company. However, a resolution of the investigation and dividend payment should remove the overhang and boost the share price.