Fromentin's sudden resignation raised eyebrows, given the passion with which he expounded his plans for the group.

The group played down the circumstances surrounding Fromentin's resignation, saying he left on amicable terms to pursue other business interests.

'His entrepreneurial style of management served Lyons well in its formative stages, but as Lyons enters a new growth phase and gains critical mass a different management approach is required,' the group said.

He had recognised it was time to hand over to a new CEO 'capable of steering the group through the coming growth phase', said the group at the time of the resignation.

Fromentin was replaced by co-founder Ian Hewitt.

Sources said Fromentin was forced to leave by a Hewitt-led faction, following a fierce fight over the company's strategic direction. Hewitt is said to have had the backing of Nedcor Investment Bank, which held R9m convertible Lyons' debentures. The debentures were convertible into 60-million Lyons' ordinary shares. Fromentin had displayed enormous excitement about the group's venture into structured, capital and asset finance.

In building the structured finance business, the group acquired Donne Investments for about R2,5m, settled through the issue of 11,9-million Lyons ordinary shares.

Donne Investments specialised in securitisation, debt origination and asset management. Hewitt and his faction did not share that excitement.

Speculation has it that this venture may have set Fromentin on a collision course with Nedcor Investment Bank, which has its own structured finance division, and led ultimately to his departure. Under Hewitt's leadership, Lyons then closed down the structured finance division.

Explaining the Lyons profit warning at the weekend, Hewitt said it was attributable solely to the closure of the structured finance division. In dismantling the structured finance division, the group had to get rid of nine highly skilled individuals, two of whom had left while the others had to be retrenched.

Hewitt maintained there was no connection between Fromentin's departure and the closure of the structured finance division. 'This was purely a business decision,' said Hewitt.

He said the decision had been influenced by the fact that the structured finance market was increasingly being dominated by banks, which made it difficult for smaller players to compete.

Business Day