Smash repairer AMA Group restrained from sacking CEO

Australia’s largest smash repair company AMA Group has become embroiled in a Federal Court battle after a foiled attempt to sack its chief executive.

Australia’s largest smash repair company AMA Group has become embroiled in a Federal Court battle to restrain it from sacking its chief executive.

The Federal Court on Tuesday made a temporary order preventing Gold Coast-based AMA from sacking Andrew Hopkins in relation to unspecified allegations the company claims it had received from an employee.

The company had hired McGrath Nicol to undertake an “independent forensic investigation” into the allegations.

Mr Hopkins, who has been chief executive for five years and is the company’s third largest shareholder, told The Australian the dispute was related to a “personal falling out between him and the board” and any allegations against him were groundless.

AMA shares slumped 14.2 per cent to 64c on Wednesday, cutting the market value of the company by almost $82m to $475m. Mr Hopkins, who holds 40.79 million shares in the company, saw the value of his stake slide $4.5m to $26.1m on Wednesday.

AMA, which is struggling with widening losses because of a decline in the number of crashes during the COVID-19 shutdown, operates 200 centres across the country that repair more than 300,000 vehicles each year.

AMA Group repairs more than 300,000 vehicles each year.

Mr Hopkins said he had not been made aware of the nature of the allegations and remained working at the company as its chief executive.

According to the Federal Court order, Mr Hopkins made the urgent application to stop the sacking, alleging he was being oppressed as a minority shareholder.

The Corporations Act provides that a court can step in to prevent oppressive action against a minority shareholder, including a situation where that shareholder is denied involvement in the affairs of the company.

Federal Court Justice Anna Katzmann ordered that the company be restrained from dismissing Mr Hopkins pending a hearing into the matter. AMA said it would defend the action but declined to comment further because it was before the court.

Mr Hopkins founded the Perth-based Gemini Group, a claims management and vehicle repair service business, which merged with AMA Group in 2015. Between 1990 and 2004 he had been managing director of a body repair group in the UK.

AMA chief executive Andrew Hopkins

He also owns the Aqua Resort, an exclusive beachside holiday retreat in Western Australia’s Margaret River region, and a winery called Swings and Roundabouts.

Mr Hopkins had overseen the effective doubling of the size of the business in the year before the pandemic with acquisitions including Suncorp’s repair business Capital SMART and Melbourne-based ACM Auto Parts.

AMA kicked off a $216m equity raising to help fund the acquisition of Capital SMART, which operated 50 sites across Australia and serviced more than 179,000 vehicles.

But with the impact of COVID-19 hitting its bottom line, the company sought to cut debt and reduce costs last year.

AMA sold its automotive components and accessories division to GUD Group last month for $70m as it sought to reduce debt. The company made a net loss of $62.12m last financial year compared with a $21.7m profit the previous year.

AMA said its core businesses were continuing to rebound well from the disruptions associated with COVID-19. It would report its first half results to the market next month.

Mr Hopkins told the company’s annual general meeting in November that it had successfully negotiated reduced rent for most of its sites, stopped all non-essential capital expenditure projects and closed any loss making or marginal sites. The board and senior management team also took a pay cut and no cash bonuses were paid last financial year.

“The outlook for AMA remains very positive, especially considering the year that has been,” Mr Hopkins told the meeting.