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

An embattled ASX-listed Queensland dental group has used a technicality to derail plans by its sacked CEO and former chairman to radically shake up the board.

Mike Timoney CEO of Smiles Inclusive. Picture: Annette Dew

FIGHTING INTENSIFIES

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

The embattled Gold Coast-based dental group this week has used a technicality to derail plans by sacked CEO Mike Timoney and former chairman David Herlihy to radically shake up the board.

Company lawyers said the pair’s effort to get four new directors appointed at a May 22 EGM could not proceed because a required notice of at least 30 business days had not been issued.

The legal eagles even went so far as to question the basic intelligence of investors.

“Our client is concerned that additional nominations at this late stage will result in confusion amongst shareholders and complicate the meeting on 22 May without providing any substantive benefit,’’ they said.

Former Smiles Inclusive CEO Mike Timoney. Picture: Annette Dew

Timoney, who founded the company, still sits on the board and controls 17 per cent of the stock, fired back yesterday at what he considers a load of condescending nonsense.

He said the board’s move “smacks of a dictatorship’’ that will deny shareholders the opportunity to vote on the four potential directors, including one who spent 12 years as the boss of Officeworks. He also hopes to oust chairman David Usasz and director Tracy Penn.

Ramping up the fight, Timoney and Herlihy wrote to the ASX and ASIC this week to seek their intervention to correct what they called “the deteriorating corporate governance of Smiles Inclusive and the resulting risks to current and future shareholders’’.

They have demanded the resignation of Smiles director (and former Morgans stockbroking boss) Peter Evans, who is overseeing the EGM even though they allege he is “hopelessly conflicted’’ because of his alignment with Usasz and Penn. Evans has rebuffed the criticism as unfounded.

The gents want to secure a new date for the EGM but this appears unlikely. If their efforts are thwarted at the meeting, look for them to push for change at the AGM later this year.

 

LONG SHADOW

Speaking of the Gold Coast, it’s been six long years since the $2 billion collapse of LM Investment Management group and the reverberations are still being felt.

The latest casualty is auditor Reginald Williams, who has had his right to practice fed through the shredder after he went to great lengths to try to keep the whole matter hushed up.

The awkwardly-named Companies Auditors Disciplinary Board has cancelled Williams’ registration over his alleged failure to properly scrutinise the financial report of the LM Managed Performance Fund in 2012.

About 4500 investors had tipped more than $400 million into the fund, which made disastrous loans to develop a planned 1000-home subdivision at Pimpama.

ASIC determined that Williams’ work was deficient regarding a raft of issues, including related party loans, the going concern of the business and fees.

Williams appealed the board’s banning decision last year and sought a stay of their ruling. He also tried to win confidentiality orders so that his name and evidence of the case would be suppressed.

His bid to keep a lid on the case has just been thrown out but his appeal on the substance of the matter remains ongoing.

Williams can still also appeal to the Federal Court in his efforts to keep the whole thing under wraps but the fact that you’re reading about it right now would seem to make that effort entirely futile.

Williams, who founded Williams Partners Independent Audit Services on the Gold Coast in 2000, did not return a call seeking comment yesterday. His details have already been wiped clean from the company website.

Back in 2016, ASIC failed in its effort to have then-bankrupt LM founder Peter Drake and two other executives fined up to $1.2 million and banned from running companies for alleged breaches of their director’s duties.