Channon in shock abdication

Ilion chairman, chief executive and co-founder Wayne Channon was forced to resign suddenly from the troubled distributor last week after the City appeared to lose confidence in his leadership.

He was replaced as chief executive by Serge van Gorkum, former group product and marketing manager, who left Ilion's French operation earlier this year.

Rob Johnson, managing director of Metrologie UK, reaffirmed his intention to assume the role of Ilion managing director last week. Group finance director Minh Tran Chau will join the board in January. Michael Sayers will become non-executive chairman.

Channon, who announced his resignation to the stock market on 4 December, told PC Dealer: 'I fell on my sword. The City expects a certain code of behaviour and after three profit warnings, it was the honourable thing to do.'

But a number of channel sources suggested his resignation had been precipitated by board-level pressure to refocus on value-add sales. One said: 'The board was clear it wanted the direction to be value-added. A lot of people feel Ilion has been trashing margins over the past few months.'

Tony King, sales director at ACC UK, said: 'I think Ilion had become volume-oriented - like a Computer 2000 of the networking world - and had lost its way in the market.'

Channon denied there had been conflict over margins. 'There have been certain issues between myself and the board but it was nothing to do with volume or value,' he said. 'I'm an entrepreneur and certain board members are more conservative than I am.'

Johnson was keen to assert that Ilion would re-establish a focus on value-add. 'We have a lot of work ahead of us. The future for Ilion will be value, not volume,' he said.

Senior resignations from the distributor in recent weeks suggested there had been conflict over strategy. At the beginning of November, sales director Lynette Summerfield and group operations director David Ives were ousted, along with four other sales support staff. The departures followed the resignations of finance director Jeff Collard, European sales director Charlie Stewart and managing director Allan Mack.

Channon's resignation follows an announcement from Ilion on 26 November that profit would be marked down from #5 million to #800,000.