SurfStitch ex-chief Justin Cameron hits back in court

Former SurfStitch chief executive Justin Cameron has launched a strident defence of his actions.

Surfstitch founders Lex Pedersen, left, and Justin Cameron. Picture: Toby Zerna

Former SurfStitch chief executive Justin Cameron has launched a strident defence of his actions while running the troubled online surfwear retailer in the face of allegations he deliberately inflated profits.

The provocative accusations have been put forward in court documents that form SurfStitch’s defence to an increasingly hostile legal battle with suitor Coastalcoms.

The spat between the two parties relates to disputed licensing deals.

At the heart of the allegations levelled against Mr Cameron is the $20.3 million reversal of revenue in its accounts for fiscal 2016, which was announced on June 9 and contributed to a $155m full-year loss.

In documents delivered to the District Court of Queensland, the company accused Mr Cameron of abusing his fiduciary duties in allegedly inflating earnings through the first half of fiscal 2016.

“Mr Cameron caused the company to enter into a contractual scheme with Coastalcoms and TCI, allegedly for the purpose of inflating the revenue and profit of SurfStitch for the first half of the 2016 financial year in a manner that contravened the provisions of the Corporations Act 2001,” SurfStitch said.

The purported contraventions of the Corporations Act were made without the board understanding the nature of the actions by Mr Cameron, according to SurfStitch.

Mr Cameron, a co-founder of the business who surprisingly exited in March after the first of several profit downgrades, quickly rejected the claims, which he says were not put to him before being publicised.

“Mr Cameron strenuously denies SurfStitch’s allegations,” a statement on behalf of the former CEO said. “SurfStitch’s ASX release dated June 9, 2016 indicates the contracts in dispute took effect from 15 March 2016, which was after Mr Cameron left the company. SurfStitch’s own ASX release admits its allegations have not been proven or considered by the court.”

Reasons for his sudden departure have never been provided, with Mr Cameron saying his quiet exit was made on the whims on the company’s lawyers, with directions for him not to disclose details to the media.

Despite the explosive allegations, the former chief executive is not facing a claim from SurfStitch amid legal proceedings that have seen millions of dollars in damages sought by both SurfStitch and Coastalcoms through claim and counterclaim in Queensland’s courts.

Coastalcoms is tied to surf website Coastalwatch, which launched a failed bid for SurfStitch in November, and Crown Financial, which owns 10.4 per cent of SurfStitch.