QXL has taken on a new general counsel, who plans to slash the company's legal spend by 75 per cent.
Tom Parkinson, who was head of legal and company secretary at MediaKey, replaces Anisa Dhanji, who has left QXL for a judicial role advising the Government on immigration issues. "We spent about £1m on legal fees in 2000, but the budget for this year will be about a quarter of that," said Parkinson. He identified three reasons for the decision: QXL's low share price; the presence of outside investors and the fact that the company is not planning any corporate acquisitions. Floated in 1999 and once valued at £750m, the online auction company is now priced at just £30m. 2001 has seen QXL running at a loss, although it is sliding back into profitability with the help of £30m of refinancing. Parkinson said: "Our main aim is to go from being a big name to a big name that makes profit. Our share price imploded along with the rest of the dotcom industry last year. "It's easier to justify spending on legal fees and acquisitions when you're valued at a very high price and when you can say you have money in the bank." The entire value of QXL is wrapped up in the £30m refinancing, which came from a mixture of investment banks and private and institutional investors. "As we now have outside backers monitoring how we spend our money, this is another reason to keep overheads low," explained Parkinson. During 2000, the group acquired Idefi, 62 per cent of Ibidlive, 99.6 per cent of Bidlet and 66.2 per cent of Ricardo.de. "But we're not doing any deals at the moment and our expenditure has historically concentrated on acquisitions," Parkinson said. Parkinson will continue to use QXL's main adviser Brobeck Hale & Dorr. Linklaters & Alliance, which acted alongside Brobecks on the company's £313m purchase of Swedish-based Bidlet, will also be retained. Anisa Dhanji was unavailable for comment.