Smiles in midst of new issue

UNDER-SIEGE Gold Coast dental group Smiles Inclusive has denied accusations it issued 10 million shares to stack the deck in its favour ahead of a crucial boardroom battle next week.

On October 15 the Burleigh Heads-based company published a statement to the ASX saying it had issued 10.271 million shares at 2.5 per share to raise $256,000 for working capital and to pay back debt.

The share issues did not require approval from shareholders as it was under the 15 per cent threshold of total shares allowable under listing rules.

The announcement brought forth accusations from former Smiles dentists Dr John Camacho, Dr Arthur Walsh, Dr Philip Makepeace that the share issue was intended to shore up support for the board ahead of a key vote on October 23.

The three dentists were seeking to have the board replaced at next Friday’s meeting saying it had let shareholders and, in particular, dentists down by failing to live up to its promises in the company prospectus.

Since listing in March 2018 the company had been plagued by problems, including lawsuits, poor financial results and boardroom battles.

Shares had been suspended from trading since March and ASIC had taken legal action against the company for its failure to release its FY20 firsthalf results.

In a statement Dr Camacho, Dr Makepeace and Dr Walsh said the share issue had only been disclosed after they asked for a copy of the register ahead of the meeting.

“Smiles directors are digging themselves an ever-deeper hole,” they said.

“The Smiles fiasco is doing untold damage to the hardearned reputation, credibility and market values placed on the dental industry. We are committed to holding the perpetrators to account.”

A Smiles spokesman denied the company had breached ASX disclosure rules.

He said the statement from the dentists was “misleading and deceptive”.

“The shares issued by Smiles were part of the capital raising program that Smiles has previously announced,” he said.

“This raising is for the purposes of funding the turnaround program adopted by Smiles’ board, which is now seeing results.”