Controversy amps up at Keybridge Capital’s annual meeting, led by Nicholas Bolton

A bizarre annual meeting parsed a three-way control tussle, boardroom upheaval, conflicts of interest and more.

Managing director Nicholas Bolton and director Jeremy Kriewaldt have both been appointed deputy chairman. Picture: Supplied

It’s no stranger to controversy, and Keybridge Capital’s charms are elusive, to say the least.

Yet somehow the investment minnow is the prize in a three-way tussle for control, despite the resignation of chairman John Patton on Tuesday due to a conflict of interest, removal of a director for non-attendance at board meetings, the stock’s suspension from trading since last July, virtual banishment from the directors and officers insurance market except at prohibitive rates, and a qualified 2019 audit opinion upgraded to a disclaimer after a still-undisclosed $5m investment coincided with a “lockout” of directors.

These and other matters were dissected at a bizarre annual meeting on Tuesday, which lured a grand total of seven people to a rooftop reception centre on Melbourne’s tree-lined St Kilda Road.

Self-styled entrepreneur and Keybridge managing director Nicholas Bolton joined Mr Patton at the front table, with support from Deloitte audit partner Ian Skelton to parry a stream of questions from two representatives of suitor Geoff Wilson’s WAM Active.

The day before, a majority of Keybridge directors rejected a 6.5c-a-share offer from WAM Active, valuing the target at $11m.

They cited a higher, 6.6c a share pitch from a company associated with Mr Bolton, Aurora Dividend Income Trust, of which Mr Patton is managing director -- hence his retirement from the Keybridge board at the end of the meeting.

The line-up of contenders in the three-way Keybridge battle has now settled around Mr Bolton with a 5 per cent stake, WAM Active (23 per cent), and Farooq Khan’s Bentley Capital (20 per cent).

On Tuesday, a fed-up WAM Active voted against the Keybridge remuneration report, forcing a second strike.

It also supported the required follow-up resolution to spill the entire board at a later meeting, which was passed with 69 per cent support.

Wilson Asset Management chairman and chief investment officer Geoff Wilson said Mr Bolton said Mr Bolton had been disqualified by ASIC as a director “who is now getting paid $330,000 a year to run an $11m company”.

“It’s unbelievable that this can occur,” Mr Wilson said.

“The performance of Keybridge has been appalling in terms of the wealth destruction, so let the shareholders decide if the whole board should be removed.

“We’ve made our bid to clean up a company that’s consistently disappointed investors -- the quicker it’s cleaned up and taken off the bourse the better it will be for everyone.”

Mr Wilson said WAM had been in “constant contact” with ASIC and the Australian Securities Exchange about various matters involving Keybridge.

“Where’s the mysterious $5m gone?” he asked.

In October, Keybridge confirmed in response to a query from the ASX that it had paid about $5m in a transaction around the time of its trading halt in July.

While the investment did not eventuate, Keybridge told the ASX it had not asked to be repaid because it was in “ongoing discussions” with the other party to try and resolve impediments to the transaction.

The company said it had obtained a personal guarantee as security.

While a media report from last year said the funds were to be used in Anthony Catalano’s purchase of Australian Community Media, the old Rural Press operation that runs a group of regional newspapers, Mr Bolton declined to comment.

Mr Skelton told the meeting that Deloitte had questioned the recoverability of the $5m, and had not received any further documentation since then.

Mr Patton said Keybridge directors were “comfortable” with the company’s position, and only one director had been opposed to the transaction, which had not been structured as a loan.

In other resolutions, a director originally nominated by Mr Bolton’s group, corporate lawyer Jeremy Kriewaldt, was re-elected.

Richard Dukes, another corporate lawyer associated with Mr Bolton, failed in his re-election bid.