Crown gets the needle

A SUBSTANTIAL shareholder of SurfStitch has criticised the online retailer’s three-month share suspension and the conduct of its board.

Crown Financial owns a more than 10 per cent stake in SurfStitch and is also locked in legal action against the Gold Coast-based company over a content sharing deal.

In a letter to SurfStitch yesterday, Crown managing director Joakim Sundell said his company was concerned by the uncertainty of SurfStitch’s ongoing viability.

“Crown is also deeply concerned that (SurfStitch) has been and continues to be operated in a manner which is contrary to the best interests of the company and its shareholders,” Mr Sundell said.

“SurfStitch is in a precarious position and disclosure to the market to date has been superficial at best.”

SurfStitch yesterday declined to comment on the letter which included 33 questions for the board, including whether the retailer expected to be solvent by the end of the calendar year.

Crown earlier this week called for an extraordinary general meeting to vote on SurfStitch’s chairman Sam Weiss’s removal. SurfStitch shares were suspended late last month until at least the end of August after it was hit with a $100 million class action from law firm Quinn Emanuel, alleging misleading and deceptive conduct and a breach of continuous disclosure obligations.

The class action is open to anyone who bought or held SurfStitch shares between August 27, 2015 and June 9, 2016. SurfStitch shares have plummeted from $2.13 to an all-time low of 6.8¢ in just 18 months.

This week, SurfStitch informed the market Gadens Solicitors are also threatening to start an open class action.