Departing Party

31 May 2006

PartyGaming Plc announced last week that the remaining two of its four co-founders are resigning from its board of directors. Operations Director Anurag Dikshit is stepping down to focus on developing new products and platforms as head of research and special projects, while Group Marketing Director Vikrant Bhargava wishes to leave the company at the end of the year.

"The technology, operations and marketing teams at PartyGaming have both strength and depth, and we are confident that they will continue to flourish."

Dikshit and Bhargava, together with the PartyGaming's other two founders, husband and wife Ruth Parasol and Russ DeLeon, raised close to £1 billion (US$1.88 billion) by floating shares of the company on the London Stock Exchange in July 2005. Bhargava sold £61.5 million ($116 million) worth of shares, while Dikshit sold £420.9 million ($793 million) worth.

A joint statement issued by the two departing directors reads, "Deciding when to reduce the level of executive responsibility is one of the most difficult decisions that entrepreneurs have to make. The technology, operations and marketing teams at PartyGaming have both strength and depth, and we are confident that they will continue to flourish. Accordingly, both we and the board now feel that the management infrastructure is in place to allow us to step down from our current roles. We are delighted with the recent appointment of Mitch Garber as chief executive officer. His knowledge of our business and the online gaming sector, coupled with the strength of the supporting management team, means that the group is in good hands."

Statements in the press in the past week have cited anonymous individuals in the company as explaining that Bhargava is exhausted with the work he has undertaken for the company. One source told London's The Telegraph, "Vikrant has been here since 2000. I doubt very much if he's taken a day off since then."

While Bhargava intends to embark on other pursuits at the end of the year, Dikshit will remain with PartyGaming as head of technology development. One PartyGaming representative said Dikshit was "deeply committed to our success and deeply committed to this business." Another said, "He's the best technology brains we've got. All our technology is proprietary, and most of it is Anurag."

Bhargava retains 8.6 percent of PartyGaming's shares, and Dikshit retains 30.4 percent. Neither can sell any more shares because of their positions on the company's board and because they remain locked into their holdings until the end of June. Their resignations have prompted speculation, however, that they may both want cash in some of their shares after the June 30 deadline.

It has also been speculated that the resignations are the result of an attempt by incoming CEO Mitch Garber to professionalize PartyGaming's management team, but a company spokesperson told The Guardian that "these are decisions that have been taken entirely by Vikrant and Anurag."

Dikshit's responsibilities will be allocated between Bhagwan Dass Goel, PartyGaming's group technology director, and Joel Leonoff, who will be appointed to the revised role of group operations director. The company says it does not intend to fill Dikshit's position on the board because not doing so will re-establish the balance between independent and non-independent directors.

PartyGaming's announcement indicated that although Bhargava seeks to pursue other interests, he will continue to advise the company after he leaves.