ASX says no power to investigate Smiles meeting
INSURGENT Smiles Inclusive shareholders have failed in their goal of co-opting the sharemarket operator to investigate May’s failed meeting to overthrow the board.
Dr John Camacho and Dr Arthur Walsh previously backed former director Mike Timoney’s campaign to remove chairman David Usasz and now former director Tracy Penn from the board over allegations they failed to act appropriately.
Smiles listed on the ASX last year but the dental rollup’s once $60 million market capitalisation has largely vanished in the face of poor results, boardroom infighting and legal actions.
Dr Camacho and Dr Walsh wrote to the ASX in June alleging voter fraud at May’s shareholder meeting and asking the sharemarket operator to appoint scrutineers to oversee voting at a second EGM.
Smiles is yet to confirm or schedule a second meeting.
ASX chief compliance officer Kevin Lewis responded to the letter stating the ASX had no power to investigate May’s meeting because the resolutions were considered under the Corporations Act and not the ASX’s listing rules.
“That Act is enforced by the Australian Securities and Investments Commission not ASX,” the letter reads.
“It is ASIC, not ASX, that has the jurisdiction to investigate and take action in relation to any voting irregularities.”
Dr Camacho and Dr Walsh are then advised that the courts are the proper forum to challenge the votes from May’s meeting.
The letter goes on to say that “if requested by ASIC, ASX might consider exercising its power to appoint a scrutineer in relation to a resolution under the Corporations Act, where ASIC has the jurisdiction to take corrective action if the resolution is not validly passed”.
This was taken to mean by Dr Camacho and Dr Walsh that the ASX had expressed “an openness” to co-ordinate oversight of Smiles’ second
EGM.
“We are advised this represents an Australia first,” they said in a media statement.
However, an ASX spokesman said this was a “misunderstanding” of the operator’s position.
“We don’t believe such an issue (a resolution not being validly passed) has arisen previously,” he said.
Smiles’ share price yesterday closed steady at 13.5¢. The company has flagged a fullyear loss of at least $4 million.