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Seven years is a reasonably long time to run one of Europe’s biggest companies. But it was still rather a strange moment for Martin Roman to quit as ceo of CEZ, the Czech electricity group.

Roman has told the Czech press he is planning to leave the job – at a time when CEZ has suffered a profit decline, is undergoing EU and central bank investigations and is planning a future strategy announcement. But he won’t be going very far – he’s likely to take over as chairman of the CEZ supervisory board.

Roman, who is regarded as one of the most successful Czech managers, told journalists that leaving the ceo’s suite was purely his idea, after initial reports suggested he was pushed. CEZ couldn’t be reached for comment.

“A few months ago, I told the prime minister that I would like to step down and he asked me if, given my long experience, I could serve in the company’s board. I accepted this offer,” Roman was quoted as saying by Czech newspaper Lidove noviny.

Roman is well known for his good relationships with politicians. A Tuscan holiday with the then-PM Mirek Topolanek in 2009 is one well-known example. But the announcement came as a surprise even to the highest political circles in Prague.

Several MPs, including government frontbenchers, are now demanding explanations, especially as CEZ (CEZPSP:PRA) is supposed to announce a key strategic plan in the next few weeks. The group recently reported a 17 per cent drop in first half net profits to 23.9bn Czech koruna.

During his seven years at the top of CEZ, Roman managed to turn what was a local utility company into one of the most powerful European companies with investments and partnerships across central Europe.

Technically, CEZ’s chief executive reports to the supervisory board. However, since 70 per cent of CEZ is owned by the Czech state, it comes down to the government to decide on senior appointments. According to press reports, Roman will be succeeded by the current chief operating office Daniel Beneš. No surprise there.

Roman will be missed in the markets. This is what KBC Securities analysts said in a notes to clients:

We consider the news negative. Martin Roman was respected among the investors. His development strategy has been successful over the years. The departure of CEO could also encourage speculations about growing political risks, making the company’s governance more complicated.

CEZ stocks took a hit after the announcement, falling 0.86 per cent to CZK760.70 in morning trading, compared to a 1.09 per cent increase for the Prague benchmark PX index, on which CEZ is listed.

Related reading:
CEZ v EU: the €800m question, beyondbrics
CEZ report hits Czech equities, beyondbrics
Czech CEZ – a carbon emission fat cat, beyondbrics12

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