Orco Property Group founder out as CEO in management shake-up

PRAGUE, March 19 Wed Mar 19, 2014 5:01pm EDT

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PRAGUE, March 19 (Reuters) - Orco Property Group's founder Jean-Francois Ott is leaving his role as chief executive in a management shake-up that illustrates the company's biggest shareholder tightening its control over the central European real estate developer.

Ott started Orco in Prague over two decades ago but the company with properties around central Europe has been slow to recover after getting hit hard in the global financial crisis.

Ott will stay on as board chairman, Orco said on Wednesday.

The board, controlled by Czech real estate investor Radovan Vitek, who has become the largest Orco shareholder since buying into the company in 2012, appointed Tomas Salajka as a new CEO.

"Today the company begins a new step along what I know will be a long and successful path," Ott said in the company's statement.

"I wish the best of luck to the new management and offer them my full support as I continue to work with the company at the board level."

Orco's board also ended executive contracts for Nicolas Tommasini, Ales Vobruba and Brad Taylor. Jiri Dedera was named managing director of Orco.

At Orco's subsidiary Orco Germany, in which Vitek has also boosted his stake, Ott, Tommasini and Taylor were also removed as executives, although Ott and Tommasini will remain on the board, the company said in a separate statement.

Martin Nemecek will become Orco Germany's CEO and Edward Hughes will head the board, with Salajka as deputy CEO.

Orco Germany last week announced its first real estate acquisition in seven years, helped by capital increases in recent months that have been taken up separately by both Ott and Vitek.

Vitek, one of the top real estate investors in the Czech Republic, has said that the group needs more funding and that Orco Germany is its only significant liquid asset.

He was able to remove Orco board members representing two U.S. funds that battled him over strategy in January.

Orco posted a 142.4 million euro net loss in the first nine months of 2013 after taking impairment charges on some projects.

The company, founded in 1991, has properties in the Czech Republic, Slovakia, Hungary, Germany and Poland, including the 192-metre Zlota 44 residential tower in Warsaw. (Reporting by Jason Hovet, editing by David Evans)

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