Smiles Inclusive shareholders reject attempt by founder Mike Timoney to regain control of listed Gold Coast dental group

Smiles Inclusive shareholders have given their verdict on a mutiny attempt by the company’s ousted founder at a fiery general meeting.

Mike Timoney has lost his bid to regain control of Smiles Inclusive.

SHAREHOLDERS have rejected a bitter campaign to regain control of Gold Coast dental group Smiles Inclusive run by ousted CEO Mike Timoney, instead backing management and its plan to turn the embattled company around.

Investors are meeting now in Brisbane at an extraordinary general meeting called to decide the company’s future.

The results showed 53.05 per cent of proxy votes by investors, who have seen the stock price plummet more than 80 per cent in the past year, rejected Mr Timoney’s motion to dump new chair David Usasz and 51.7 per cent were against the bid to remove director Tracy Penn.

Smiles shares traded flat today, opening and closing at 16c ahead of the 4pm meeting.

With 49.89 per cent of the votes lodged by 4pm on May 20, shareholders also rejected a third motion to remove “additional directors”.

The number of outstanding votes yet to be lodged would not be enough to sway the result of those motions.

Shareholders approved motions to remove Mr Timoney from the board as well as his ally former chair David Herlihy by 59.8 per cent and 60.75 per cent respectively.

A motion to elect a new director, Joao Camacho, was closer on the proxies, with 49.16 per cent against, 45.27 per cent for and 5.57 per cent open going into this afternoon’s extraordinary general meeting.

Since notices calling for the shareholder meeting were issued last month, both sides have waged a fierce, and sometimes bizarre campaign, for control of the company.

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Mike Timoney with wife Ildi Redak on their wedding day.

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The fight began when Mr Timoney was removed earlier this year in the wake of poor first-half results.

Mr Timoney, with Mr Herlihy’s support, called for an extraordinary general meeting, accusing new management of being “renegades” and failing to follow proper boardroom procedures.

He also questioned the independence of new director Peter Evans and said Ms Penn was ‘moonlighting’ with a second job as a direct sales agent for a scrapbooking company.

Mr Usasz and Ms Penn hit back, insisting Mr Timoney was dumped due to the poor performance of the company under his watch. They are also suing Mr Timoney and Mr Herlihy for misconduct, part of which relates to allegations they engaged wife Ildi Redak to throw extravagant cocktail events that were marked up by between 10 and 30 per cent.

Smiles Inclusive Limited executive director Tracy Penn has been accused of ‘moonlighting’ with a second job for a scrapbooking company.

Going into the meeting, Mr Timoney and Mr Herlihy had the support of a substantial bloc with a collective holding of 18.78 per cent.

Mr Usasz, Ms Penn and independent director Peter Evans, had 4.77 per cent of the stock as well as the backing of a number of joint-venture partners and influential stockbroker Morgans, which has advised its clients to vote against Mr Timoney and Mr Herlihy.

Mr Usasz and his fellow directors now have a huge task ahead in turning Smiles around.

In April it flagged a full-year loss of “at least $4 million” after previously downgrading guidance from a net profit of $2.3 million to a loss of between $500,000 and $1 million.