K2fly issues mea culpa after director resignation goes wrong

Software maker K2fly has issued a mea culpa to the market, after it failed to comply with three major rules around a director’s resignation in January and created a chain of events that caught the ASX’s attention.

Director Noel Bonnick quit in January, but his resignation wasn’t accepted until February 1 and wasn’t announced to the market until two weeks later.

K2fly (ASX:K2F) said this was because they were negotiating a share package in lieu of director fees.

But the company yesterday conceded a delay in telling the market was a mistake, as was the fact that it never released an Appendix 3Z — the document showing the departing director’s shareholding in the business.

“The company acknowledges that an announcement in relation to the resignation of Mr Bonnick should have been made immediately,” the company told investors yesterday.

“The company also acknowledges that an Appendix 3Z for Mr Bonnick was not lodged at the date of his resignation or at the date the announcement was made on February 15, 2017. The company acknowledges that this was a breach of the listing rules.”

Mr Bonnick founded and chairs Perth engineering firm K2 Technology, which developed the software behind K2fly.

Five months after his resignation Mr Bonnick was issued with retirement shares.

He was still considered a related party at this stage, but the company did not ask shareholders to approve the issue.

The ASX required K2fly to cancel those shares and they intend to ask shareholders to approve a new package for Mr Bonnick.

Company secretary Gino D’Anna was not available for comment before publication, and chairman Brian Miller declined to comment.

K2fly describes itself as a “consulting systems integrator”, which means it sells software to manage infrastructure assets.

The company said these problems had not occurred with any other director resignations nor were they reflective of the company’s corporate governance.

However, it didn’t explain the reasons for the issues around Mr Bonnick’s exit, why they didn’t tell the market immediately, or why the shares were issued five months after his resignation without shareholder approval.