Gold Coast dental group Smiles Inclusive faces court action by corporate regulator over failure to deliver half-year results

Gold Coast-based dental group Smiles Inclusive faces court action over its continued failure to release its half-year results.

GOLD Coast-based dental group Smiles Inclusive faces court action over its continued failure to release its half-year results.

The company, now led by CEO Michelle Aquilina, saw its shares suspended from trading on March 2 after failing to meet the deadline for delivering audited results for the six months to December 31.

It then released its March cashflow report on June 1 showing positive cashflow of $500,000 but later was forced to admit it made a series of mistakes and actually had negative cashflow of $614,000 – a difference of more than $1.1 million.

The company said the mistakes were a result of “transposition and flow through errors” made when the original reports were lodged.

Smiles Inclusive investors have seen the stock price plummet to as low as 3.1c since listing at $1 a share in 2018.

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On Thursday Smiles released a statement showing its response to a grilling from the ASX over the reporting errors.

The company wrote it uncovered the errors following questions from the market operator’s compliance team.

It said they were a combination of “human and system errors” and mistakes in the December quarter report flowed through to the March quarter.

Towards the end of the letter Smiles reveals it has received a notification from corporate regulator the Australian Securities and Investments Commission that it intends to take court action over its failure to release the audited half-year accounts.

Smiles Inclusive has 51 dental practices throughout Australia. Photo: iStock

“ASIC have (sic) not granted an extension for SIL to lodge the accounts and have advised of their intention to submit an application to the court in respect of SIL’s default,” the letter reads.

The Bulletin put questions to ASIC about its plans to go to court but the regulator, through a spokesman, declined to comment.

However, the penalties for Smiles if it fails to comply with a court order can range from fines being imposed to an order to wind up the company.

Elsewhere in the Smiles letter to the ASX, the company says the decision by 10 dentists, including John Camacho, to terminate their service agreements with the company would not have a material impact on the company’s operations.

“Given the terminations happened when SIL’s practices were temporarily closed, SIL has used this downtime to conduct a recruitment drive to seek to replace the outgoing dentists, and the recent easing of restrictions has enabled the business to now provide full services under COVID-19 guidelines.”

Smiles listed in April, 2018 under a partnership model whereby dentists sold their practices and reinvested 40 per cent of the proceeds in return for a share of the profits from their clinics.

Shares were suspended at just 3.5c.