Health: Smiles bites down as it reveals an investigation into the ex-CEO’s behaviour
Health & Biotech
Health & Biotech
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No one is smiling anymore at dental group Smiles Inclusive (ASX:SIL), amid news of an investigation into a former CEO’s behaviour and retaliation against the scrappers looking to roll the board.
Today the board released its version of events, after former CEO Mike Timoney and former chairman David Herlihy claimed they left with concerns around corporate governance last week.
The Smiles board said in a statement that it had communicated “specific concerns” about Timoney’s behaviour before he was effectively sacked on February 20 and has launched an investigation.
Herlihy, who bought about 18 per cent of Smiles on the day he resigned, and Timoney launched a motion last week to spill the new chair David Usasz and board member Tracey Penn.
Smiles is having none of their reasons for the spill, however.
“Both Mr Timoney and Mr Herlihy have failed to explain the basis of their concerns to the board,” the company said.
“Unfortunately, Smiles’ business performance under Mr Timoney and Mr Herlihy’s leadership since its IPO in April 2018 has been far below the expectations of the board and the broader market.”
It cited the sub-par full year profit guidance of $2.3m given in November last year and the subsequent update that foresaw not a profit but a $500,000 to $1m loss as evidence.
It said that after this the newly appointed CEO Tony McCormack was brought in to review the business. He raised some “legitimate concerns” and Timoney was told on February 20 that the board had lost confidence in him.
Smiles said he agreed to resign as CEO, a move Herlihy was supportive of at the time.
“Mr Herlihy did not resign as the Company’s chair in protest at ongoing abuse of good governance. He did so because he lost the support and confidence of the majority of the board,” the statement read.
“Smiles entirely disagrees with Mr Timoney and Mr Herlihy’s contention that there was somehow a lack of governance involved in Mr McCormack’s appointment or Mr Timoney’s stepping down as CEO,” the company said.
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