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

Allegations of abuses of power and breaches of directors duties were thrown around and strenuously denied as the war of words escalated between rival camps within a Queensland dental group.

The war of words between two rival camps within a Queensland dental group has escalated. Picture: stock photo

WAR OF WORDS

THE war of words between the two rival camps inside struggling dental group Smiles Inclusive escalated dramatically on Monday.

Allegations of unlawful acts, abuses of power and breaches of directors duties at the Gold Coast-based company were thrown around and strenuously denied – and all this ugliness was no April Fool’s Day joke.

Sacked CEO and company founder Mike Timoney attacked chairman David Usasz as one of several “renegade directors’’ who should resign “following a number of attempts to suppress shareholder rights’’.

Timoney, who is allied with fellow board member and ex-chairman David Herlihy, hopes to oust Usasz and director Tracy Penn at an EGM on May 22 and get dental specialist Dr John Camacho appointed.

“Last week the company, led by the renegade directors, including chairman David Usasz, threatened my advisers that if I proceeded with a shareholder requisition notice to remove directors, my employment with Smiles Inclusive would be terminated immediately and that I would no longer be a director of the company,’’ Timoney said.

“This is an (allegedly) unlawful act. It is an abuse of power and control designed to prevent the legitimate exercise of shareholder rights. This is now a matter for the regulatory authorities.’’

Those regulators, of course, are the ASX and ASIC but it’s not clear if they will act.

Herlihy weighed in too, noting that he had resigned last week in protest at an “ongoing abuse of good governance by the renegade directors’’. Responding to the provocation, the loss-making company, which runs 56 clinics under the Totally Smiles banner, released a statement saying it “vehemently denies the allegations’’.

“Smiles entirely disagrees with Mr Timoney and Mr Herlihy’s contention that there was somehow a lack of governance involved in … Mr Timoney’s stepping down as CEO,’’ the company said.

“Smiles is continuing to investigate Mr Timoney’s behaviour and has communicated to (him) that it may take further steps once this investigation is further progressed.’’

A company lawyer wouldn’t elaborate on that statement but City Beat understands it involves alleged breaches of directors duties.

In case all this wasn’t enough, wealthy investors Lev Mizikovsky and Jonathan Hamilton will seek to have Timoney and Herlihy booted off the board at that May 22 EGM.

ANOTHER BREACH

THE mind-blowing spectacle of chronic corporate governance failures has continued apace at Corporate Travel Management. Boss Jamie Pherous is one of four family members who are directors of an entity called Shamiz Pty Ltd, which owns nearly 527,000 CTM shares valued at more than $13 million as trustee of the Sami super fund.

Even though it was created in mid-2015 as part of his father’s estate planning, Pherous said yesterday he was not aware until last week that his stake “gave him a deemed relevant interest’’ in the shares.

ASX rules say such a stake must be disclosed within five days, meaning there’s been a clear breach of the reporting obligations.

“CTM now considers that those procedures need to be strengthened,’’ the company said in a jaw-dropping bit of understatement.

The company said it has now retained external legal consultants to review all director holdings, meaning additional breaches could come to light.

This embarrassment comes hot on the heels of Pherous having to register a new company to hold his $500 million-plus fortune after failing to pay renewal fees to ASIC. It also follows the failure of former chairman Tony Bellas to make timely disclosure of the shift of $4.5 million CTM shares to his ex-wife as part of a divorce settlement.

“For any other company, the latest compliance whoopsie would be absolutely remarkable. For Corporate Travel it’s just another day at the office,’’ one observer quipped.

“What other surprises will new chairman Ewen Crouch uncover when he tries to instil basic governance on this mob?”