No smiles in battle of boardroom
A BOARDROOM stoush between directors of an embattled Gold Coast dental group has escalated with one of the company’s major shareholders accusing the new chairman of threats and an “abuse of power”.
Former Smiles Inclusive CEO Mike Timoney together with ex-chairman David Herlihy have called a meeting to remove new chairman David Usasz and executive director Tracey Penn, who have denied the allegations.
Mr Timoney was asked to stand aside from the CEO role earlier this year in favour of Tony McCormack after presiding over a poor first-half result, which saw the company report an after-tax loss of $1.59 million.
Guidance of FY19 was revised from a net profit of $2.3 million to a loss of between $500,000 and $1 million.
Mr Timoney said in a statement yesterday that “renegade directors” led by Mr Usasz have made threats, through his advisers, to sack him and remove him as a director if he proceeded with his motion at the meeting scheduled for May 22.
“It is an abuse of power and control designed to prevent the legitimate exercise of shareholder rights. This is now a matter for the regulatory authorities,” he claimed.
Mr Herlihy said the threat was the “final straw” that led him to resign last week in protest at what he calls an “ongoing abuse of good governance by renegade directors”.
However, Mr Usasz denied any threats were made against Mr Timoney.
He said he had merely advised Mr Timoney and his adviser they were investigating him over a number of unspecified issues. He refused to elaborate on what these issues referred to.
Smiles said yesterday the company’s performance under Mr Timoney and Mr Herlihy was “far below expectations” and that it was investigating Mr Timoney for “specific concerns” relating to his behaviour. Smiles again did not specify any behaviour in the statement.
“Smiles entirely disagrees with Mr Timoney and Mr Herlihy’s contention that there was somehow a lack of governance involved in (CEO Tony) McCormack’s appointment or Mr Timoney’s stepping down as CEO,” the statement reads.
“Both Mr Timoney and Mr Herlihy have failed to explain the basis of their concerns to the board.”
The statement goes on to say the company is investigating whether to take further steps against Mr Timoney.
Smiles also denies Mr Herlihy resigned in protest over poor governance.
“He did so because he lost the support and confidence of the majority of the board,” Smiles said.
Mr Timoney and Mr Herlihy have put forward paediatric dentist and SIL shareholder John Camacho for election to the board at the meeting.
Mr Camacho said the alleged threat to Mr Timoney is “ill-advised”.
“It is not in keeping with the expectations of all the dentists who joined Smiles Inc. I anticipate there will be substantial backlash by dentists to protect their interests,” he said.
Mr Timoney said the alleged threat would not prevent the meeting being held.
“All shareholders have a right to speak their truth. A general meeting is typically the only forum where mum and dad investors get a chance to have their say and to hear directly from directors.”
The allegations come after major shareholder Lev Mizikovsky, founder of Brisbanebased homebuilding outfit Tamawood and Jonathan Hamilton last week proposed two new resolutions for the meeting, aimed at removing Mr Timoney and Mr Herlihy from the board.
Smiles Inclusive listed last year under the leadership of Mr Timoney after acquiring a portfolio of 52 practices under a partnership model with individual dentists who sold their clinics but remained investors in the business.
The share price for the company, which listed at $1 a share in April last year and was previously valued at close to $60 million, closed yesterday up 1¢, or 5.7 per cent, higher at 18.5¢.