Boardroom stoush at Gold Coast dental group Smiles Inclusive escalates as ex-CEO Mike Timoney alleges threats

A boardroom stoush between directors of an embattled Gold Coast dental group has escalated with the company’s major shareholder accusing the new chairman of threats and an “abuse of power”.

A BOARDROOM stoush between directors of an embattled Gold Coast dental group has escalated with one of the company’s major shareholders accusing the new chairman of threats and an “abuse of power”.

Former Smiles Inclusive CEO Mike Timoney together with ex-chairman David Herlihy have called a meeting to remove new chairman David Usasz and executive director Tracey Penn, who have denied the allegations.

Mr Timoney said in a statement today that “renegade directors” led by Mr Usasz have threatened, through his advisers, to sack him and remove him as a director if he proceeded with his motion at the upcoming meeting on May 22.

He said he would not resign.

Former Smiles CEO Mike Timoney. Picture: Annette Dew

“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,” he claimed.

Mr Herlihy said the threat was the “final straw” that led him to resign last week in protest at what he calls an “ongoing abuse of good governance by renegade directors”.

However, Smiles issued a statement this afternoon saying it “vehemently denies the allegations” by Mr Timoney and Mr Herlihy.

It said the company’s performance under Mr Timoney and Mr Herlihy was “far below expectations” and that it is investigating Mr Timoney for “specific concerns” relating to his behaviour.

It did not specify any behaviour in the statement.

In November, under Mr Timoney the company was forecasting a net profit of $2.3 million but that was downgraded to a loss of between $500,000 and $1 million in the half-year results.

Mr Timoney was dumped as CEO and replaced by Tony McCormack.

“Smiles entirely disagrees with Mr Timoney and Mr Herlihy’s contention that there was somehow a lack of governance involved in (CEO Tony) McCormack’s appointment or Mr Timoney’s stepping down as CEO,” the statement reads.

“Both Mr Timoney and Mr Herlihy have failed to explain the basis of their concerns to the board.”

The statement goes on to say the company is investigating whether to take further steps against Mr Timoney.

Smiles also denies Mr Herlihy resigned in protest over poor governance.

“He did so because he lost the support and confidence of the majority of the board,” Smiles said.

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Mr Timoney and Mr Herlihy have put forward paediatric dentist and SIL shareholder John Camacho for election to the board at the meeting.

Mr Camacho said the alleged threat to Mr Timoney is “ill-advised”.

Lev Mizikovsky has put forward a resolution to remove Mike Timoney and David Herlihy from the Smiles Inclusive board. AAP Image/Steve Pohlner

“It is not in keeping with the expectations of all the dentists who joined Smiles Inc. I anticipate there will be substantial backlash by dentists to protect their interests,” he said.

Mr Timoney said the alleged threat would not prevent the meeting being held.

“All shareholders have a right to speak their truth. A general meeting is typically the only forum where mum and dad investors get a chance to have their say and to hear directly from directors.”

The allegations come after major shareholder Lev Mizikovsky, founder of Brisbane-based homebuilding outfit Tamawood and Jonathan Hamilton last week proposed two new resolutions for the meeting, aimed at removing Mr Timoney and Mr Herlihy from the board.

The outspoken Mr Mizikovsky has made headlines previously for battling a $219 traffic fine for crossing a white line on his custom-built Harley Davidson and for helping fund the legal battles of fallen former Ipswich Mayor Paul Pisasale.

A tally last year showed he owns more than $100 million in stock in four companies and more than $30 million in properties.

Smiles Inclusive listed last year under the leadership of Mr Timoney after acquiring a portfolio of 52 practices under a partnership model with individual dentists who sold their clinics but remained investors in the business.

However, the listing has been disastrous with Smiles reporting an after-tax loss of $1.59 million on practice revenue of $16.1 million for the half year.

The company blamed a number of operational issues for the loss. They included the nondisclosure of a court case by a practice vendor, the unexpected deaths of a practitioner and business manager, delays in branding, failure to put practitioner monitoring and staff rostering systems in place and additional integration and stamp duty costs.

The share price for the company, which listed at $1 a share in April last year and was previously valued at close to $60 million, was trading 1c, or 5.7 per cent, higher this afternoon at 18.5¢.