Smiles sues its founder

THE former head of Gold Coast dental group Smiles Inclusive is being sued for allegedly engaging his wife to provide swanky cocktail parties at Ferrari dealerships and overcharging as much as 30 per cent.

According to a statement of claim filed yesterday in the Supreme Court in Brisbane, Mike Timoney is also accused by the company of receiving more than $79,000 in company funds, which included close to $40,000 for trips to the US and Europe, that the company says were not incurred as part of “proper Smiles business”.

Mr Timoney denies the allegations and says the markups on hospitality services were normal practice and the trips were for personal reasons conducted under a salarysacrifice arrangement.

He said the claims were an attempt by “renegade directors” to prevent shareholders voting on appointing its preferred directors to the board of the embattled company.

Mr Timoney, who owns 17 per cent of Smiles stock, and ex-chairman David Herlihy have called a meeting on May 22 to remove new chairman David Usasz and executive director Tracey Penn.

They say they have “grave concerns regarding ongoing corporate governance issues” and have put forward the names of four new directors to “strengthen the board”.

The new board of Smiles is suing Mr Timoney, Mr Herlihy, Pink Diamond Events Pty Ltd, linked to Mr Timoney’s wife, Romania-born Ildi Redak, and Investment Centre Pty Ltd, which is controlled by Mr Timoney.

Smiles is seeking compensation and restitution from the parties for what it alleges was serious misconduct and breaches of law.

Among the allegations are Mr Timoney asked Mr Herlihy to direct payments from Smiles to him for $7650 for a trip to Europe in March and April, 2017, and the US for $10,893.28 in May.

Both trips were allegedly for personal reasons.

Mr Timoney yesterday told the Bulletin he will be defending the claim.