A group of activist shareholders including Paradice Investment Management and Australian Ethical have succeeded in their efforts to roll the board of embattled ASX-listed platform Praemium, paving the way for sacked CEO Michael Ohanessian to be reinstated in the top job.
At an extraordinary meeting in Melbourne on Friday, shareholders voted with the requisitioning shareholders to remove chairman Greg Camm and three other directors, replacing them with Barry Lewin as chairman and Stuart Robertson and Daniel Lipshut as new directors.
The move to oust the entire board caps off a turbulent four months for $160 million Praemium which included Mr Ohanessian being unceremoniously dumped following a heated disagreement with Mr Camm over the direction the company.
After Friday’s meeting, which saw around three quarter of the shareholder base vote 53 per cent to 46 per cent in favour of the board being removed, Mr Ohanessian told The Australian Financial Review that shareholders had had a chance to have their say.
“As a shareholder in Praemium myself, I am confident that this renewed board will act in the best interests of the company and its shareholders,” he said.
“Over the past couple of months, I have been encouraged by the many messages of support I have received from shareholders, clients and peers showing enormous respect for the Praemium team and the company’s strategic direction.”
Mr Lewin said the new board will now move to reinstate Mr Ohanessian. This leaves the fate of current CEO Robert De Luca up in the air.
The refreshed board maintains that he is the right person for the job despite Praemium’s assertion that the company’s share price had underperformed recently.
Mr Lewin told the Financial Review this week that be believed Mr Ohanessian had been “disrespectfully” fired.
“My fellow new directors and I look forward to a functional and effective working relationship with Mr Ohanessian and the talented Praemium team as we focus on providing the best service and technology for clients, realising the growth opportunities in front of us, and delivering strong returns for shareholders,” he said.
In the past year, during which Praemium shares hit a high of 53¢ and low of 28¢, the stock gained 16 per cent, which puts it on par with Hub24 and ahead of OneVue (down 24 per cent) and Managed Account (down 23 per cent).
While not commenting on any specifics to do with Praemium, KPMG partner Stephen Walmsley said that ructions at the board level can cause shareholders to get skittish, but “it is well established that one of a board’s key responsibilities is to appoint, and remove, the chief executive officer”.
In an earlier interview with the Financial Review, Mr Ohanessian said that he hoped that the the start of 2017 would soon be seen a “nightmare” that would live only in the company’s past.
On Friday, he was readying to look to the future.
“I would like to take the opportunity to thank Praemium’s staff for their continued focus during a period of uncertainty. At the right time, I am looking forward to reconnecting with the team and pushing forward with our plans,” Mr Ohanessian said.
In April, the former Praemium board took the unusual step of issuing a 23-page notice of meeting which painted Mr Ohanessian as routinely difficult and includes details of the back room stoush where Mr Camm accused Mr Ohanessian of “berating” him.
But on Friday, the board accepted the vote and reinforced the strength of the company.
“The shareholders have spoken and a new board is appointed. Praemium is a good business with very good people and the outgoing board give Mr Lewin and his colleagues our best wishes in governing the company,” outgoing Chairman Mr Camm said.
Michael Smolders from The Abercrombie group, which joined activist shareholders Paradice, Australian Ethical as well as Mr Ohanessian and his wife Candace (as shareholders with 15 million shares) said that he was pleased Praemium shareholders accepted the resolutions.
“We have full confidence that the newly elected independent board will govern in the best interests of all shareholders. Praemium is now able to move forward positively and focus on creating long term shareholder value,” he said.
A board meeting will be convened soon where the new directors will discuss Mr Ohanessian’s re-appointment. (Source: Australian Financial Review, 12 May 2017)