The flamboyant founder of no-frills airline easyJet, yesterday bowed to investor pressure and announced his intention to step down as chairman.
Haji-Ioannou's departure, scheduled to take effect following the next annual meeting in March 2003, marks the end of an era for the company he founded in 1995 with a £5m loan from his Greek shipping tycoon father.
The announcement sent easyJet shares plummeting 15.5p to close at 508.5p, valuing the business at about £1.3bn.
The pressure to resign came primarily from a single institutional shareholder, the Co-operative Insurance Society (CIS), which although it owns less than 1% of the company's stock, remains one of easyJet's largest institutional shareholders.
A spokeswoman for CIS said the company was unhappy with the fact that Haji-Ioannou and his family owns almost 60% of easyJet's shares. Haji-Ioannou himself is the majority shareholder, with a 28% stake in the firm.
"It's all about corporate governance," the spokeswoman said. "A majority shareholder should not be chairman of the board."
Haji-Ioannou said he agreed with the concerns, but denied he had been forced out. He said his departure was part of a wider boardroom shuffle which would result in the majority of easyJet's directors being independent.
"I am doing it voluntarily. Nobody has forced me to do this. I am driving this," he said.
Haji-Ioannou will now focus on his chain of internet cafes and car rental business, and is planning to launch cheap films through easyCinema.
The 35-year-old and his family will retain their stake in easyJet, but Haji-Ioannou said: "As I engage in new ventures, I may need to liquidate some of my stock from time to time. As I have said before, I need to sell my past to finance my future."
As chairman, Haji-Ioannou's share dealings would come under close scrutiny because of his intimate knowledge of the low-cost airline.
He added: "The history of the City is littered with entrepreneurs who hold on to their creations for too long, failing to recognise the changing needs of the company, its business and its shareholders."
An analyst at Merrill Lynch said Haji-Ioannou was admitting his skills as an entrepreneur were different to those required to chair a major company.
"On the operation front, there is no change to the business and it should be noted that easyJet has been run by Ray Webster as CEO for the past two years," the analyst said.
CIS welcomed Haji-Ioannou's departure announcement. Its chief investment manager, Chris Hirst, said: "We are delighted that easyJet has committed itself to having a board with a structure and composition appropriate for a major listed company."
Sir Colin Chandler, a 61-year-old City veteran, has been appointed deputy chairman and will succeed Haji-Ioannou.
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AV News