Bubs co-founder and chief Kristy Carr ejected by board after refusing its directions

Kristy Carr once shared a virtual stage with US President Joe Biden who praised her supply of Bubs infant formula to America, but now the co-founder and boss has been shown the door.

Directors of infant milk formula company Bubs have lost patience with its co-founder and chief executive Kristy Carr – who once shared a stage with US President Joe Biden celebrating the arrival of Bubs tins into America at a time it faced an infant powder shortage – and has terminated her employment, citing a failure to comply with reasonable board directions.

The long simmering disputes between Ms Carr and her board has finally spilt over and also seen the immediate dismissal of her boardroom ally and confidant Dennis Lin, who is a former executive chair of Bubs and who Ms Carr has long credited for its recent success.

The pair will now be viewing all further developments at Bubs from the outside, with both turfed out by the board and the latest chapter in a long-running dispute that saw Ms Carr take personal leave in April for four weeks.

Her period of personal leave coincided with the exit of chairman and her ally Mr Lin from the company she founded in 2005 and which only last year was basking in the glory of a personal endorsement from US President Biden as Bubs rode to the rescue of an infant formula shortage in America that had parents and politicians worried.

Bubs shares soared 80 per cent on the back of that US supply deal, and Ms Carr appeared via a videolink on stake with President Biden as the company was praised for its supply of Bubs formula.

The company became the first international infant milk supplier to be signed up to the US government’s frantic efforts to replenish its dangerously low supplies of infant milk formula, with many parents in the US driving hours to secure a single tin as stocks run low.

But now that glow has faded, the share price has collapsed by 50 per cent and Ms Carr is out the door as the board sent her packing.

In a statement to the ASX on Wednesday, Bubs said Ms Carr’s employment had been terminated with immediate effect due to failure to comply with reasonable board directions.

US President Joe Biden speaks with Kristy Carr via a video link. Picture: Getty Images

Former executive chair Mr Lin’s employment with Bubs has also been terminated with immediate effect.

“Noting the recent deterioration in Bubs’ financial performance over the half year, the non-executive directors considered the time was right for a change in leadership and to change the governance framework of the company to ensure that it aligns with ASX Corporate Governance Principles and best practice,” the statement said.

It is believed the board’s displeasure with Ms Carr and her ally Mr Lin was fuelled by reports she was allegedly lobbying major shareholders and stakeholders, through telephone calls and meetings, despite her taking extended leave due to ill health.

Her close working relationship with Mr Lin looks to have also cost his position. In a recent post on her LinkedIn account Ms Carr called Mr Lin a Bubs “true leader” and “mastermind” of its strategic direction who made “the impossible, possible!”.

She went on to say in her public post that Mr Lin was the “smartest, most strategic person” she had ever met, a mentor and who had always acted with integrity in the best interests of the business and all of its shareholders.

“I 100 per cent stand by him”.

She will stand by him now, with both of them shut-out of the boardroom as Bubs goes through a strategic review of its business and how it spends and directs its marketing in the Asian region.

In late April, Bubs announced that a strategic review of the global business, with a particular focus on expenditure management and the Chinese market. The review is on track to be completed by June 30.

“We acknowledge Kristy’s long service to Bubs and the role she has played in building the Bubs brand to the position it enjoys today,” Bubs chair, Katrina Rathie said.

Richard Paine will continue to act as interim CEO until a permanent CEO is confirmed.

“The board thanks Richard Paine for his continued strong performance as Bubs’ interim CEO. In support of Richard and the Bubs executive team, the board will lean in to contribute its strong commercial, fast moving consumer good, dairy and international markets expertise to drive Bubs’ strategy forward in Australia, USA, China, and international markets.

“The board is fortunate to have strong capability and skills to help assist in the strategic review, and we will update the market on the outcomes of the strategic review and the future leadership of Bubs in due course.”

On Sky Business news on Wednesday night it was reported that a possible cause of the rift between Ms Carr, Mr Lin and the other directors was over the business relationship with Bubs biggest shareholder, an investment fund called C2 Capital Partners which is backed by Chinese online giant Alibaba and has around 15 per cent of the company. There were reportedly tensions between representatives of C2 on the Bubs board and others over business arrangements with Alibaba rival, Chinese online player JD.com.

Bubs shares were up 2.7 per cent to 19c in early trading on the ASX.