The ASX thinks Uniti Wireless is lying about those fired co-founders
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Wireless internet provider Uniti Wireless (ASX:UWL) is still insisting it had no plans to fire its co-founders one day after listing, following a second query from the ASX questioning the timing of the sackings.
Uniti listed on the ASX on February 13 after raising only 73 per cent of the $18 million it hoped for in its IPO. The next day, it announced that it had terminated the employments of co-founders Sasha Baranikov, also the chief operating officer, and Che Metcalfe, also the chief technical officer.
The ASX sent it a please explain last month, wondering why there had been no disclosure of the firings in the lead-up to listing, particularly given the fact that, in its prospectus, Uniti said Mr Metcalfe and Ms Baranikov had the “appropriate range of independence, skills and experience” and “indicated that they are able to devote sufficient time to their duties”.
Uniti responded that CEO Michael Simmons decided on February 12 to recommend the terminations because they were “in the best interests of the company and necessary to enable the commencement of the rationalisation program he had developed, including the need to implement change rapidly”.
Supposedly, Messrs Metcalfe and Baranikov were given their marching orders after the market closed on February 14.
But the ASX hit back strongly this week, sending a second query letter, made public on the ASX website, saying it “questions the candour of this response”.
“It seems reasonable to assume that the CEO was contemplating the potential termination of employment of Mr Metcalfe and Ms Baranikov prior to February 12,” wrote Adrian Smythe, manager of listings compliance at the ASX, in a publicly available letter.
The terminations were in connection with the integration of FuzeNet, a company Uniti acquired the day before listing. In its prospectus, Uniti said Stephen Picton and Ben Seaman, the CEO and CTO of FuzeNet, would not continue with the business once it was merged with Uniti.
It also noted that, without Messrs Picton and Seaman, that there was a “risk the business may not perform at the same level without their involvement or oversight” — but said that risk was mitigated because Mr Simmons and Mr Metcalfe would “assume oversight and management of FuzeNet”.
Mr Smythe asked Uniti for specifics of the timings of the CEO’s rationalisation program and when it realised the co-founders were surplus to its requirements, especially in light of the fact that Mr Metcalfe was to play such a critical role.
Mr Simmons confirmed he was “not aware of any concerns” with Mr Metcalfe’s ability to perform this role until February 11, but that on that day “it became apparent the functions which were to be carried out by Mr Metcalfe could also be included in the CEO’s role”.
Uniti said it was prioritising cost savings in the acquisition of FuzeNet and debut on the ASX, and once Mr Simmons “formed the view and identified the extent of cost savings that could be achieved” he recommended that Mr Metcalfe and Ms Baranikov be terminated.
“The prospectus did disclose there would be cosy synergies relating to employees but it was not contemplated at that stage that those would include Mr Metcalfe and Ms Baraknikov,” it said.
The firings of Messrs Metcalfe and Baranikov left the company with only three directors, but Uniti appointed a fourth on Wednesday, hiring Vaughan Bowen, a mergers and acquisitions specialist who helped turn M2 Group into an ASX 100 company that later merged with Vocus Group (ASX:VOC).