Report Suggests Police Were Called to Scott Office After Youngone Reps Arrived with Armed Security

Apr 16, 2024 at 15:19
by Sarah Moore  
Photo Scott Sports
Photo: Scott Sports


Police were called to Scott headquarters in Givisiez, Friborg on April 3 and the Berner Zeitung is now reporting that minority shareholder Beat Zaugg was the one that called the police. The Swiss newspaper reports that he did this because representatives of the majority shareholder of Scott, South Korea's Youngone, appeared at the headquarters with security guards that were allegedly armed.

On March 31, an announcement came out that said that Zaugg had been replaced as CEO of Scott Sports by its board of directors and that Juwon Kim has been appointed as the new CEO. Zaugg told Bicycle Retailer the following day this announcement did not come from Scott Sports and was made via a PR agency that works for Youngone. The PR agency responded with a statement that "the ultimate decision body of a company is the board of directors and the board is clearly entitled to terminate the employment with the CEO."

Two days later, we reported that police were called to Scott headquarters to deal with a dispute that Fribourg police spokesperson Bertrand Ruffieux told DayFR Euro was "a civil matter, a dispute between managers." He added that no one was injured or arrested and the police had been called to the scene to "find a way to open a discussion, and for people to understand each other. "

Scott and Youngone have been working together since 1997 and the South Koreans bought an initial 20 percent stake in Scott in 2013 before buying a slim majority with a 50.01 percent stake in 2015. The Berner Zeitung says that Zaugg retained a share of around 47 percent and the rest is owned by management.

After failing to secure a loan from Credit Suisse to cover down payments, Scott turned to Youngone to secure a 150 million Swiss franc loan at the end of 2023 with a 4.6% interest rate. The filing said at the time that "SCOTT SPORTS SA plans to use this money loan for the company's working capital, etc., and will appoint a person designated by the company as the Financial Controller to manage and supervise the process."

Zaugg told Bicycle Retailer that while Youngone controls a majority of the board, they did not terminate him correctly and he remains the brand's CEO, a minority shareholder and chairman of its parent company board.

According to the Berner Zeitung's sources, Zaugg has been an owner of Scott Sports since 1990 when he used his savings to take a one percent stake in Scott. In 1998 he was able to gain a 33 percent stake in the company thanks to a loan from Credit Suisse. In 2002 and 2003 he increased his share to 100 percent and paid of his debts within five years before selling the majority of his shares for a reported 135 million francs.

The Swiss newspaper reports that Zaugg has continued to operate as CEO as early as last week and that "at the moment it looks like a conflict that will ultimately be decided at a legal level. In order to remove Zaugg as CEO of Scott, a majority decision by the board of directors of Scott Sports AG is required that meets the legal requirements. If the Koreans want to remove Zaugg as chairman of the holding's board of directors with immediate effect, they must call an extraordinary general meeting."

We are hopeful that a resolution is imminent, and the brand can figure this out and move forward soon. We've reached out to representatives from Youngone and Scott, and will update as this story develops.

Author Info:
sarahmoore avatar

Member since Mar 30, 2011
1,396 articles

105 Comments
  • 280 5
 Police turned up at Scott's headquarters with the sirens blaring NINO NINO NINO.
  • 3 0
 Ok that was good, thanks for the laugh
  • 1 1
 This has absolutely nothing to do with brendan...
  • 12 0
 That's the sound of da police?
  • 156 1
 I heard HBO are making a series out of this. From the makers of The Wire, "The Cable (tourism), inside the inside job"
  • 7 0
 I mean, the whole story kind of reminds me of the series "The Consultant" on Prime, where this malicious consultant (Christoph Waltz) takes over that game development company
  • 3 2
 Shots fired
  • 33 1
 @sewer-rat: you mean Scott's fired.
  • 43 1
 Out on the streets, they call it Schurter
  • 3 1
 @egb81: Just sprayed coffee out my nose, well done
  • 5 0
 More drama than Yellowstone.

I think this can only end with a massive explosion in some executive’s office.
  • 86 0
 "they did not terminate him correctly"

Beat Zaugg replied "I'll be back!"
  • 9 0
 I think i just wet myself laughing , good job i was in the bath
  • 33 1
 they thought they could lock him out remotely
  • 2 1
 @johnny2shoes: But after they suspended him internally nobody really knew what position he was in
  • 1 1
 hes swiss, not austrian. Big Grin
  • 56 0
 Dude went from 1 to 100 percent stake in the company, sold off too much to become rich, then stumbled into a literal hostile takeover.
  • 15 0
 No kidding. He could have sold 49% if he wanted to be sure to not get fired.
  • 29 0
 @SJP: Unlikely someone would have paid that much for less than a controlling share. 50.01% of a company is much more valuable than the other 49.99%.
  • 11 0
 @bnflynn: dude, finally it makes sense. the whole time i thought "how can someone be THAT dumb?"
  • 51 0
 Youngone should just buy Kona and Pole
  • 4 0
 Don’t tell Scotty…
  • 9 0
 @iduckett: Scotty doesn't know!
  • 4 0
 Youngone should buy Youngtalent
  • 32 0
 Can't these guys just solve this in a duel and be done with it? Like a dual slalom race? I recall Claudio built some cool tracks around the office for employees to have fun on so whoever wins is the one who is most in touch with what bike riding is all about and gets to guide the company. This ain't no wild west, this is Heidi-land. Conflicts are sorted in a civilized manner. Dual slalom racing it is.
  • 30 1
 I think you are underestimating the ruthlessness of the Swiss. A country doesn't get rich and stay that way by making watches, pocket knifes and cheese with holes in it, no matter how good they are.
  • 12 0
 @catweasel: you're forgetting as well that they guard the actual pope.
  • 1 0
 A dual duel
  • 3 0
 You mean a duel slalom race.
  • 2 0
 @nickfranko: This sounds more like a medieval tournament where opposing and properly armoured riders approach each other in a slalom motion whilst trying to knock the opponent of their bikes with a long stake. Not quite what I had in mind though of course it does still seem a whole lot more peaceful than the gun scenario.
  • 20 1
 When is @dangerholm (the Real 'Thigh Master') going to show up at Scott HQ, knocks some heads around and set these two clowns straight? Lemmy blue jean shorts to the rescue!
  • 18 0
 Tell what you want, but Juwon is the Dick Pound of CEOs' names Smile I would hire him without an interview Smile
  • 19 1
 Beat Zaugg..... THAT, is a very odd name.
  • 18 0
 Like from the 5ht Element movie or something Smile
  • 13 0
 It's not odd here.

And to be the fun guy:
It's pronounced [ˈbe:at] and not [biːt] as the beat of song,
  • 11 0
 When I read Youngone I keep picturing Vyvyan Bastard from the Young Ones.
  • 2 0
 @st-lupo: absolutely- the episode where Neal is trying to get the bank manager to extend his line of credit before they end up using all the furniture to heat the flat seems especially relevant…
  • 2 0
 @st-lupo: ha ha, me too.
  • 1 0
 Like Dick Pound. Lol.
  • 1 0
 @themickeyd: Oh yeah, Neal! That was even more appropriate. Smile
  • 2 0
 @st-lupo: me too and a bus being driven off a cliff
  • 3 0
 @st-lupo: rick mayall bless him
  • 1 0
 @themickeyd: bom shanka
  • 3 0
 @alexhyland: May the seed of your loins be fruitful in the belly of your woman.
  • 1 0
 @st-lupo: I thought it was a rapper.
  • 1 0
 @commental: Sleep gives you cancer maaan.
  • 13 1
 - You're fired! - No, I am not! I think it is good that the Zaugg guy did not get pushed over that easily. Just announcing the firing through a PR agency with no paperwork sounds a bit sloppy, and also illegal.
  • 1 0
 But if the parent company ultimately has the authority to take this action, and matters of process, timing and procedure are the only impediments to making his termination effective then what's his endgame? No sense picking a fight you cannot win, especially when you're fighting someone who controls an asset you have partial ownership over.

Your point is still valid though, why announce a termination that wasn't properly done and is not effective, that seems silly.
  • 5 0
 I identify as employed!
  • 10 0
 What an unworthy affair & probably a nightmare for PR, brand image etc.
  • 7 0
 Nah. It’s not such a PR nightmare. Frankly, I’m enjoying the show.
  • 1 0
 Right? I have no interest in giving my money to a company filled with such corporate bullshit.

...not to say that others in the industry aren't also filled with this shit, but they seem do a better job of hiding it!
  • 8 0
 Okay, so Scott may soon appear in the insolvency listings, is what I'm reading into this. Sorry Nino and Brendan.
  • 9 1
 The Beat goes on, the Beat goes on.
  • 2 0
 Love that tune Big Grin Drums keep poundin' the rhythm to the brain. Ladidadidi, ladidadida...
  • 8 0
 I still feel like this is a month long Aprils Fools joke …
  • 4 0
 What are Swiss laws like regarding weapons? I’m curious if the guards were breaking the law. If so they appear to have suffered no consequences.
Anyway, Scott wasn’t on my list of next bikes but this seems stupid and juvenile, dropping them further down.
  • 1 1
 With the right paperwork you can own machine guns, but like everything in Switzerland it's not cheap. If the guards were hired locally they probably had their licenses in order.
  • 6 0
 @Fix-the-Spade:
That‘s basically impossible. Aquiring a license for an actual automatic firearm is very difficult in the first place, let alone being allowed to open carry. So, yeah, it‘s very likely that those arms were illegal, even if not fully automatic
  • 1 1
 @sirtobey: “basically…very difficult…very likely….”. So you don’t actually know the laws.
  • 1 0
 @sirtobey: It's perfectly legal for private security to carry pistols in Switzerland. It's not even that hard to get the license. Compared to this country they practically throw the license at you.
  • 6 0
 The final stage of employment - to become UNFIREABLE
  • 5 0
 I'm more invested in this than scotts cable tourism
  • 2 0
 What the hell is going on with Scott? The dust will eventually settle and unfortunately it will be companies like these (Pon I’m looking at you) that ultimately survive the Bike-ocalypse. What a sad state of affairs.
  • 3 0
 Great Scott, Marty! It looks like we're gonna need to go.....Back to the Future.
  • 2 0
 Zaugg and all the other shareholders don't own enough (can't be more than 49.9%) to outvote Youngone. Why bother having an extraordinary general meeting.
  • 8 0
 So everyone can be informed before making public statements and to hear the other shareholders opinions. You don't want your minority shareholders dumping their shares because they weren't informed. Also just legal stuff to make sure everything is done right, sometimes even anti-trust and such comes into play with a big takeover like this.
  • 2 1
 Because they didn't fire him properly... They told him to Beat off
  • 3 0
 So is Zaugg just living there and never leaving? He’d have to be, or they would just lock him out, right?
  • 4 0
 Zaugg got Beat at his own game. Ju won.
  • 4 1
 Juwon'a go? drop the gloves!
  • 2 0
 All the pic's do a great job of hiding the cameras recording footage for the new Scott Who's your Bosses Reality TV show.
  • 3 0
 This is starting to sound like the plot from a Bruce Willis movie
  • 2 0
 If they make of movie of it, I'd watch it.
  • 3 0
 Don't bring internal headset cable routing to a gun fight. Lol.
  • 1 0
 If he owns 47% of the company, and gets fired. He still owns 47% right? Wouldn't he continue to make money? I don't understand half this stuff...
  • 1 0
 Please can someone explain if "150 million Swiss franc loan at the end of 2023 with a 4.6% interest rate" is a good or a bad deal?
  • 3 0
 Let them fight
  • 2 0
 Is that Kim Won a camouflaged north Korean party member
  • 3 1
 I love watching big bike cannibalize itself
  • 1 0
 Any other nerds waiting for this to show up in Matt Levine’s Money Stuff?
  • 1 0
 So the Koreans arrived with guns and the Swiss responded. Sounds about right.
  • 2 0
 Apart from supporting a few rad riders I couldn't care less about Scott.
  • 2 0
 Kim went ballistic!
  • 1 0
 I'm pretty sure this will all get sorted out in no time.
  • 2 0
 and without shortcuts?
  • 3 3
 To be fair there is a sh%t ton of guns in Switzerland, think like 1 in 4 has at least one gun
  • 1 3
 I doubt the security had guns. Then the police wouldn't have been that relaxed.
  • 2 1
 Unlike murica where 1 in 4 have a fucking arsenal big enough to arm a SWAT team in their garage
  • 4 0
 Shit tons of guns doesn‘t mean it‘s legal to carry them
  • 5 4
 Was he being held Ransom?
  • 9 2
 it must be a real shock internally
  • 2 0
 This is awkward
  • 1 0
 Does this mean Scott bikes go on deep discounts? Fire sale?
  • 1 0
 Does this affect me? Asking for a friend.
  • 1 0
 tell your friend it's all fine
but it's a funny story isn't it?
  • 6 7
 I wonder how much this case has to do with the fact that Scott employees have not been paid for 2 months
  • 1 0
 Really? Yikes.
  • 5 0
 fact? what fact? who told you this BS?
  • 2 0
 In the atleast US that’s not true. Things operating and functioning normally and everyone is getting paid.
  • 3 3
 Zaugg said...."I'm no Gambler or no Ransom will remove me...."
  • 1 0
 SCOOOTT!!!
  • 1 0
 Scotty doesn't know!







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