Zygmunt making the headlines

35 years past Poland's transition into free-market economy, the time ensues for several entrepreneurs to retire. Their businesses are usually either handed over to descendants or sold to third-party investors. Succession in Poland has not been an issue brought up frequently. Until recently...

Family issues of Zygmunt Solorz-Żak are now like episodes of a gripping TV series. The very character is a media and telecommunications tycoon, controlling the largest private TV station, a satellite TV platform, two telephony and internet providers and also a power plant on top.

Divorced twice, until recently fostered relationships with three of his adult offspring, born to him by his two ex-wives. All three children were more or less successfully involved in running his numerous businesses. Half a year ago he married Justyna Kulka, aged 50, i.e. nearly two decades younger than him. The third marriage is cited by many as the source of problems and sparked a battle between the tycoon's children and his new wife.

I will not summarise the intricacies of the dispute, especially since we still know less than more. Everyone who saw the streaming of the extraordinary shareholders' meeting held last Monday might have serious doubts about Mr Solorz's capacity to make informed decisions and exercise control over his businesses.

In Poland, where everyone is an expert in any area, tribulations in the media empire are widely commented. Mr Solorz and his relatives are avidly judged. Only few commentators point out Mr Solorz might do whatever he wants with his private wealth. This assertion could be true, yet it is not, for the sake of a single important detail. Several of his businesses are listed on the Warsaw Stock Exchange. Their prices have declined by 10% to 20% since the turmoil commenced. Several small investors, institutions and pension funds have seen a chunk of their wealth evaporating. For such reason, the decisions of succession may impact virtually anybody, so are not just his private stuff.

From a banker's perspective, the stock market's reaction is absolutely justified. Mismanagement may send a sound business under quite quickly. I have seen smaller companies going bankrupt in the wake of conflicts between shareholders. For Mr Solorz’s businesses the path is longer. Mr Solorz himself does not take decisions, but can instantly appoint and oust senior executives, which means already gives sizeable potential for disruptions.