Former ABC boss Michelle Guthrie voted off Mighty Kingdom board

Former ABC managing director Michelle Guthrie has been voted off the board of game developer Mighty Kingdom, with a possible move to oust the entire board to come.

Former ABC managing director Michelle Guthrie.

Former ABC managing director Michelle Guthrie has been voted off the board of game developer Mighty Kingdom, with major shareholder Shane Yeend, whose companies still owe $2m for unpaid shares in the firm, winning the day.

Mr Yeend and Mighty Kingdom’s current board are tussling for control of the company, with Mr Yeend last week calling for an extraordinary general meeting where he will attempt to vote out the entire board and install his team, including himself.

It remains to be seen whether that meeting will be held.

Meanwhile Mighty Kingdom is still seeking to recoup about $2m which Mr Yeend has not paid for shares issued in a capital raise in August last year, after his company Gamestar committed to subscribing for $4m in new shares, but has currently only paid for about $2m worth.

Mr Yeend has been running a public campaign looking to oust Ms Guthrie from her role as chair, which she has held since before the company listed on the ASX in April, 2021.

Since listing the value of the stock has collapsed and the company has had to raise millions in new capital to stay afloat.

Mighty Kingdom floated after raising $18m in new shares priced at 30c. The stock is currently trading at 1.9 per cent, up 11.7 per cent on Thursday on low volume.

Before the company’s annual meeting held late on Wednesday, the Takeovers Panel put out a statement indicating it had accepted an undertaking from Mr Yeend that none of the shares which had not been paid for would be voted at the meeting.

Ms Guthrie told the meeting that regardless of the vote outcome, she intended to step down from her role as chair once a strategic review process, scheduled to be completed before the end of the year, “delivers an outcome acceptable to shareholders’’.

“In any event, I commit to resigning by the end of March, 2024, at the latest,’’ she said.

Ms Guthrie said she took “full responsibility for the past unsustainable cash burn of the business”.

“We had an aggressive grothh plan and made several investment decisions in an attempt to accelerate revenue.’’

Ms Guthrie said Gamestar did not deliver on either its financial commitments to the company or its promises around industry expertise.

“Once it became apparent that Gamestar did not have the available funds to settle, a position confirmed by Mr Yeend to multiple parties, we had no choice but to terminate the share subscription agreement,’’ Ms Guthrie told the meeting.

Mr Yeend in a statement to the Australian denied that his company lacks the funds to complete the deal, saying it was Mighty Kingdom’s failure to meet conditions under the deal which led to the non-payment.

Mighty Kingdom is still pursuing the $2m through legal channels.

Ms Guthrie said the company’s turnaround was on track, with its $6.9m loss in the first half of last year lowered to a $1.7m loss in the second half and there were “further improvements anticipated’’.

Ms Guthrie was voted out as chair with a vote of 54.11 per cent against her re-election. The remuneration report was also solidly rejected, with a 56.05 per cent vote against.

Mr Yeend, who himself was chief executive of Mighty Kingdom from May until late August this year, said he will now be asking for a board seat for the shares which he has paid for.

Earlier this week Mighty Kingdom issued a statement to the ASX saying Gamestar had made assertions in a letter to its own shareholders which it rejected.

The letter from Gamestar said, “We are currently in detailed discussion to potentially merge Gamestar into Mighty Kingdom and take control’’.

“If successful, this move will provide us with access to significant institutional capital.’’

Mighty Kingdom told the ASX, “it is not in any discussions with Gamestar regarding a merger or change of control transaction nor has it ever been in the past’’.

Originally published as Former ABC boss Michelle Guthrie voted off Mighty Kingdom board