Sean Corkery is to step down as chief executive and director of Irish airline software company Datalex after four years at the helm of the business he was hired to stabilise following a major accounting scandal.
Mr Corkery, who was previously chief executive of Denis O’Brien’s engineering services company Actavo, initially joined Datalex in April 2019 as its deputy chairman and non-executive director.
However, Datalex’s stock was suspended in May of that year after it failed to file full-year results on time as it dealt with the fallout from accounting irregularities that resulted in its then auditors, EY, refusing to sign off on its 2018 financial statement.
A board-commissioned review by PwC found it had overstated 2018 revenues. Its problems stemmed from a contract with Lufthansa to provide a single payment system for its five airlines, which ran over time and budget.
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Mr Corkery replaced Aidan Brogan as chief executive at that point, before then becoming chairman in June when Pascal Taggart resigned.
Funding
However, the accounting irregularities, which were referred to the Office of the Director of Corporate Enforcement – whose staff includes several gardaí – rocked the company.
Businessman Dermot Desmond, one of its bigger shareholders, agreed to continue funding the business.
It recently emerged his commitment of a €10 million debt facility to Datalex, since the airline retail software company sold a block of shares two years ago to repay previous loans from the billionaire, have become a lifeline for the group.
As revenues declined due to Covid-19 lockdowns in its key market of China, Datalex tapped into the Desmond fund. It emerged in recent months that some €9 million has been drawn down from the fund.
Mr Desmond agreed to push out the repayment date by 18 months to the end of next year, but it has come at a price with the already-high 10 per cent interest rate attached to loans increased to 15.5 per cent.
In a statement to the stock exchange on Friday morning, Datalex announced that Mr Corkery will step down as chief executive and director of the company at the end of the year.
Transition
In the meantime, he will work with Datalex chairman David Hargaden and the senior management team on the transition. An external process to appoint a successor has begun.
“Sean joined Datalex in 2019 and in his time at Datalex has provided much-needed stability and leadership to the team,” said Mr Hargaden.
“He guided the business through the Covid pandemic and is leaving the company on the back of a number of significant new and renewed partnership announcements that position Datalex well for the future.”
Mr Corkery said Datalex has made “significant progress” in the past four years as he thanked his team for their “tremendous effort”.
“Recent partnership signings are a testament to the strength of the technology we have built and the services we provide for our customers,” he added.
Under Mr Corkery, Datalex has gone from building expensive, bespoke IT systems for airlines to offering off-the-shelf products designed to minimise the amount of configuration needed to plug them into airlines’ existing systems.
Datalex saw a strong recovery in airline activity across all geographies in the first three months of 2023, after its pretax loss more than doubled last year to $11.4 million (€10.3 million) amid a delayed rebound in the Chinese market due to Covid-19 lockdowns.
However, the company is likely to hold off on a share sale in the near term amid unease among existing investors about its depressed share price, even as its prospects are improving, according to sources.
