A boardroom clash between Maltco's chief executive and its minority shareholders cost him his job, but it cost the lottery firm over €83,000 after a tribunal ruled his dismissal was illegal.

An industrial tribunal ordered Maltco Lotteries Limited to pay its former CEO John Katakis damages after it ruled that the reason for his dismissal were insufficient at law to merit his sacking.

Chaired by Charles Cassar, the tribunal ruled that the sacking was unjust especially when it was clear that the issue was not related to his work or performance but a deterioration in the working relationship between him and representatives of the firm’s minority shareholders.

The tribunal heard how Mr Katakis worked for the company since 2001. In January 2005, he was appointed CEO of Maltco Lotteries Limited, which he had set up following the privatisation of what was then the Department of Public Lotto. During his tenure, the company was doing well, and the shareholders were taking home handsome returns.

However, trouble began in 2014 when he realised that one of the representatives of the minority shareholders sitting on the Maltco Lotteries board also had interests in a casino, which was looking to start offering sports betting as a service, something which until then was only in Maltco’s realm.

He told the tribunal he flagged this conflict of interest and refused to have these people on his board. His relations with the minority shareholder started to go south, and they began complaining about him with the Greek management, saying they could not work with him any longer.

The tribunal heard how in September that year, Mr Katakis had asked for a revision of his package, but the company refused. He was offered a similar position in Morocco but he turned it down.

In June 2015, a board meeting was called and chairman Antonios Kerastaris announced that an acting CEO was being appointed, effective from the following day. It was only in October that he received a letter informing him of the termination of his employment.

Mr Katakis told the tribunal that he was never given a reason for the termination and the tribunal heard the board chairman state that “the problem had nothing to do with John’s performance as CEO of the company…”

He also told the tribunal “if the CEO of the company and its shareholders cannot work together, measures should be taken… if it comes to a personal argument, the right thing to do is change one of the elements so that the company can go ahead…”

But the tribunal found that this was an insufficient reason for the termination and it was “unacceptable” how the company had proceeded with the sacking without serious accusations. It said that had the matter been referred to mediation at the outset, the result could have possibly been different.

It therefore ordered the company to pay its former CEO €83,125 in compensation.

Lawyer Matthew Brincat appeared for the company while lawyers Georg Sapiano and Joseph Grech represented Mr Katakis.