Police called to Scott Sports HQ over “dispute between managers” as corporate power struggle continues

The corporate drama at Scott Sports continues, as police were called to the bike and sportswear company’s headquarters this week over a “dispute between managers” – just days after CEO Beat Zaugg refused to accept the company’s decision to dismiss him, sparking a bizarre power struggle within the higher echelons of the Swiss-based brand.

On Wednesday afternoon, several police vehicles belonging to Fribourg Police were spotted at the entrance to Scott Sports’ HQ in Givisiez, Switzerland.

According to a report in DayFR Euro, police were called to intervene in a managerial dispute, though one official told the outlet that “nothing serious” occurred and that no member of staff was injured or arrested.

“Nothing serious happened,” Fribourg police spokesperson Bertrand Ruffieux said. “We intervened in a civil matter, a dispute between managers.

“In this type of case, the police are called to the scene to find a way to open a discussion, and for people to understand each other. But there are no injured or anyone arrested.”

The spokesperson continued: “At the very beginning, we check the information on the assumption that it is not rubbish. Then, when we see that the case is not serious, the patrols gradually withdraw.”

> Scott Sports embroiled in bizarre “power struggle” as sacked CEO Beat Zaugg claims he’s still in charge

While it is not yet clear whether the two incidents are connected, the police’s presence at Scott HQ comes amid the backdrop of apparently former CEO Beat Zaugg’s dismissal from the company, a parting of ways Zaugg denied this week has even taken place, branding the announcement a bid to “destabilise” the brand and its employees.

Last week, Scott’s majority owner Youngone, a Korean company that took over a majority of the business in 2015, announced that Zaugg’s immediate termination after 26 years as CEO.

It was also announced that Kim Juwon, who has over 17 years of experience in investment banking and was head of growth strategy and mergers and acquisitions at Youngone, as well as being a member of Scott’s board of directors, will be taking over as the new CEO.

The decision, the company said, was taken to “refresh Scott's development to become a world-class manufacturer in bikes and other outdoor sport categories”.

However, the decision has since been challenged by an angry Zaugg, the company’s second-largest shareholder, who appears to be standing firm in the midst of what he brands a “power struggle”.

“This announcement was made to destabilise the company and its employees,” Zaugg said on Monday.

He also claimed that the announcement had been made via a PR agency that works for Youngone, not Scott Sports, and that the dispute stems from a “culture clash” between Youngone and the company.

“I am still standing in this power struggle,” he added. “Youngone’s financial support is based on the fact that, as everyone knows, stocks of consumer goods are generally tight.

“It doesn’t matter if industry consultants will support the announced interim successor Juwon Kim or not, Kim himself would have no idea about the European bicycle and outdoor market.”

> Dirty Deeds Done Dirt Cheap: Bike manufacturer Scott loses trademark case against late AC/DC singer’s estate

Last December, Youngone, a supplier to brands including Patagonia, Adidas, Lululemon, Outdoor Research, and The North Face, with factories in Korea, Bangladesh, China, Vietnam, and Thailand, announced a 150 million Swiss francs (£131 million) loan to Scott Sports for additional liquidity.

However, according to Zaugg, the need for the loan arose because Youngone had “destroyed our banking relationships”.

He said: “[Youngone] prefer we are on their infusion. Although we had other ways to finance, they didn’t let happen. They are always saying ‘We have been so helpful.’”

Zaugg also argued that while Youngone controls a majority of the board, they did go about his dismissal in the correct manner

“So far they did it wrong,” he said, without much elaboration. “This has to be my secret for the time being.”

He also concluded that Youngone’s announcement is going to put a “strain on the cooperation between the well-established Scott team and European independent bike dealers”.

“The fact that they found out about the Korean parent company's decision from the press is also something that is not exactly conducive to Scott’s values and our European ideas of management,” he said.

“I regret the announcement published by Youngone without being informed in advance. The Scott team would have preferred it if majority owner Youngone had continued to place its trust in them in the current situation and let them use their many years of experience and well-established IBD partnerships.”