Diversified services company Thorn Group (ASX:TGA) is refocusing on operations, after canning share buy-back plans and fending off board changes.

Along with a financial services division, TGA is also the owner of retail brand Radio Rentals.

The long-running brand name recently switched to an online-only model while the Thorn Business Finance division is focused largely on B2B lending solutions such as equipment finance.

Shares in Thorn Group rallied from pandemic crisis lows beneath 5c to push towards 30c on some strong sales growth, before a board battle took precedence amid a dispute over the company’s capital management strategy.

On 31 August, a group of TGA shareholders launched a motion under S249D of the Corporations Act.

The purpose of a S249D is to call a meeting of shareholders, and it can be served on any company by members who control at least five per cent of the votes that may be cast at that meeting.

The group was seeking a shareholder vote on board changes, after TGA announced plans to issue a special dividend which existing shareholders could apply for as part of a dividend reinvestment plan (DRP).

Thorn initially determined that the S249D notice was invalid. But in mid-October, the Victoria Supreme Court ruled that it was in fact valid.

Shares in TGA slumped almost 40 per cent on October 16, and the company scheduled an extraordinary general meeting for early December.

In the meantime, the board went ahead with its special dividend which eligible shareholders took up as part of the DRP.

Also in mid-October, Forager Funds Management Pty Ltd lodged an application with the Takeovers Panel, which among other things submitted that the application of the DRP was being used “other than for the purpose of raising funds”.

Prior to the special dividend, Thorn’s largest shareholder was Somers Limited, which held a 30.57 per cent stake.

By participating in the DRP, Somers received 49,241,938 TGA shares and was able to increase its stake to 39.42 per cent.

In its assessment of the application, the Takeovers Panel also noted that Thorn’s board had three directors, just one of whom was independent and two of whom were nominated by Somers.

The Panel subsequently ruled on 17 December that the special dividend was issued in “unacceptable circumstances”.

It ordered Thorn to cancel shares issued to Somers under the DRP, in order to return Somers’ shareholding to its prior level before the DRP.

The extraordinary general meeting originally called in August was held earlier this week. Motions to remove two existing directors and install two new directors were not carried.

As part of its business update this morning, Thorn also said it has suspended plans to initiate a share buyback of between $15m-$25m, first flagged on 12 October.

“Thorn’s Quarterly Activities Report, including details of key activities and Thorn’s Quarterly Cash Flow Report for the quarter ending 31 December 2020, will be announced to the market by the end of January 2021,” the company said.