HBOS inquiry hangs over new boss at Wagamama
Shamed ex-banker Andy Hornby lands £4m job but...
THE disgraced former boss of HBOS has been named chief executive of a stock marketlisted company for the first time since the financial crisis, despite an ongoing investigation into the near-collapse of his bank.
Andy Hornby ( pictured) will take over at The Restaurant Group, which has more than 650 outlets under brands including Wagamama, Chiquito, Garfunkel’s and Frankie & Benny’s. The 52-year- old could earn as much as £3.9m in his first year at the helm of the company.
But his appointment raised eyebrows in the City last night, given the live probe by the Financial Conduct Authority (FCA) into senior management at HBOS at the time of its demise a decade ago. David Buik, a market commentator at Core Spreads, said The Restaurant Group had taken ‘a real flyer’ employing Hornby.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: ‘There’s clearly a reputational risk there, that if the FCA eventually comes out with something unpleasant about HBOS – or Andy Hornby – it’s going to be a bit of a headache for The Restaurant Group.’
Announcing Hornby’s appointment, The Restaurant Group noted that two reports into the failure of HBOS by the Parliamentary Commission on Banking Standards and the FCA ‘ included adverse comment regarding certain actions of various members of senior management, including Andy Hornby’. But it made no reference to a separate ongoing investigation by the FCA into the actions of HBOS bosses before the bank was rescued by the taxpayer in a £20bn bailout. Instead, The Restaurant Group chairman Debbie Hewitt said she was ‘delighted’ to welcome Hornby to the company and praised his ‘extensive retail background’.
Hornby held high-profile jobs at Asda before joining HBOS, and at Boots and Ladbrokes Coral in the decade since his acrimonious departure. However, this is his first job as chief executive of a listed company since leaving HBOS.
Russ Mould, investment director at AJ Bell, said Hornby’s CV made him a strong candidate for his new position. But he added: ‘Unfortunately for him, wherever he goes the four letters – HBOS – will follow, especially as regulators are still investigating the bank’s nearcollapse and his role in its neardeath experience as its chief executive.’ Greg Johnson, an analyst at Shore Capital, added: ‘It does throw up a potential issue were something to come out of the FCA’s investigation.’
Hornby’s move will see him reunited with retail bigwig Allan Leighton, who was chief executive of Asda when Hornby was there, and is now a non-executive director at The Restaurant Group. The Restaurant Group is already battling a downturn on the High Street and stiff competition from online food delivery services such as Deliveroo and Just eat.
In December, it forked out £559m on the hugely popular noodle chain Wagamama, which added another 200 restaurants to its portfolio.
Profits halved to £13.9m last year after it was battered by costs relating to store closures and the Wagamama purchase.
Hornby will replace Andy McCue, who quit abruptly in February for personal reasons.
Hornby said: ‘I am delighted to be joining at such an exciting time. This is a great business, with strong brands, committed colleagues and tremendous potential to grow.’
Analysts at Barclays, however, praised Hornby’s track record. They added: ‘We believe that many sector executives may have regarded this as an unattractive or risky role to take on.
‘Hornby has significant experience in a retail environment, including managing digital transformation and integrating businesses, so while the sector is different, much of the skill- set needed is relevant.
‘Conversely, a potential concern is that because Hornby is not from the sector, it may take more time for the new chief executive to adapt as an industry executive.’ The FCA and Restaurant Group declined to comment last night. Shares in The Restaurant Group closed up 1pc, or 1.5p, at