Former Smiles Inclusive CEO launches new war of words with directors following recent praise

The founder of a southeast Queensland dental group who was ousted as CEO earlier this year, has thrown a heap of mud at both of these “renegade directors’’ in a 10-page open letter as part of his campaign to have them kicked off the board.

Mike Timoney, a major shareholder who was ousted as CEO earlier this year, threw a heap of mud at both “renegade directors’’ yesterday. Picture: Annette Dew

ONE YEAR LATER

What a difference a year makes!

Last April, Mike Timoney raised $35 million to float his dental group Smiles Inclusive and the prospectus sang the praises of two of his fellow board members, David Usasz and Tracy Penn.

The bitterness and infighting tearing apart Smiles Inclusive only seems to be intensifying

Former Smiles Inclusive CEO Mike Timoney pitches new board for troubled Gold Coast dental group

The war of words between rival camps inside struggling dental group Smiles Inclusive has escalated

The document noted that Usasz had more than 40 years of business experience in Australia and Hong Kong, including multiple directorships and more than two decades as a partner at bean counters PwC.

Penn, we were told, came to the job with more than 30 of management experience in the dental game.

But Timoney, a major shareholder who was ousted as CEO earlier this year, threw a heap of mud at both of these “renegade directors’’ on Tuesday.

It’s part of his relentless campaign to have them kicked off the board of the struggling Gold Coast group at an EGM next month.

In an open 10-page letter to shareholders, he and fellow director David Herlihy attacked Usasz for a six-year reign at now-delisted Queensland Mining Corporation (curiously based in Sydney!) that ended with him resigning the chairmanship in late 2012.

Usasz stepped down on the same day as an EGM brought on by an unhappy shareholder complaining about alleged problems of transparency, corporate governance and regulatory compliance.

Usasz also bailed out as a director of Australian Rugby Union in 2007 after then-Queensland Rugby Union chairman Peter Lewis told him he had lost the confidence of the board for allegedly failing to stand up for the state’s interest on the national body. As for Penn, the letter accuses her of taking her eye off the ball at Smiles Inclusive by “moonlighting’’ with a home-based business focused on selling greeting cards and scrapbooks over the past decade. In case this wasn’t enough, Timoney and Herlihy also got stuck in to Melbourne-based Penn for taking “multiple luxurious overseas holidays,’’ including a cruise in Alaska and soirees to Thailand and Hawaii.

Dental group Smiles Inclusive is enduring plenty of in-fighting.

ERROR OF JUDGMENT

Given this savage critique, your diarist couldn’t help wonder how all of this apparently sordid history had escaped Timoney as he was building the company and appointing directors ahead of its IPO.

Hadn’t he done any due diligence on Usasz and Penn?

Timoney told us on Tuesday that he had failed to do his homework on Usasz and now considered his board appointment “an error of judgment’’.

He claimed that Usasz had raised $200,000 in early seed capital and had later been “imposed’’ on him by the float underwriters at Morgans. With Penn, Timoney said he had worked with her since 2005 but only thought her interest in gift cards was a hobby. The wrath of Timoney and Herlihy also extends to director Peter Evans, the former Morgans boss who they allege has presided over a “corrupt EGM process’’ ahead of the May 22 meeting.

Evans and the company strongly refute that claim. Timoney and Herlihy on Tuesday called for a second EGM to give shareholders a chance to oust Evans too.

SPURIOUS CLAIMS

Smiles responded late Tuesday by accusing Timoney and Herlihy of making “spurious allegations’’ and “openly defaming a number of people’’.

The company said Evans would resign immediately if Usasz and Penn are turfed out at the EGM.

It accused Timoney and Herlihy of “presiding over a huge destruction of value for all of the company’s shareholders and other stakeholders’’.

Smiles also noted that Timoney’s actions now are eerily reminiscent of his dealings with former employer Abano, the parent company of Dental Partners.

Timoney, a former Bartercard player in the UK, started Dental Partners on the Gold Coast but later sued Abano for $4.5 million in 2014 over his allegedly wrongful firing. The case was dismissed in 2016.

The tables have turned now and Smiles sued Timoney and Herlihy last week over alleged misappropriation of funds. They deny any wrongdoing and are defending the case.