Smiles Inclusive No Images? Click here 29 March 2019 Smiles Inclusive Limited This matter gets more confusing with a second notice of request for an extraordinary general meeting to consider resolutions to remove Mr Mike Timoney and Mr David Herlihy as directors, whereas the first request for an extraordinary general meeting proposes to elect them as directors. Previously, they had both resigned recently as CEO and Chairman respectively and were requesting a meeting to have themselves voted back onto the board and to bring a supporter, Dr John Camacho, onto the board as well. Other shareholders may wonder what the bank’s attitude may be since it was the NAB’s loan covenants which were breached which brought about the replacement of Mr Timoney as CEO. There have been no company announcements concerning loan covenants recently so we must conclude that the company must still be in breach. If Mr Timoney and Mr Herlihy and their supporters are voted back onto the board it will be important that whatever actions the board takes would not provoke the bank, whose covenants have been breached, into taking action to reclaim its loans, this might possibly risk forcing the company into administration or even liquidation. It would be prudent for all shareholders to think carefully before offering their proxy vote to one of the parties. Meanwhile as Mr Herlihy has recently topped up his shareholding, those shareholders who have sold their shares in the company recently can at least be grateful to him for propping up the price, albeit at around 16.5 cents. According to announcements Mr Herlihy now owns 18% of the company but we wonder what the share price may have fallen to had he not been buying! It is difficult to contemplate how these internal wars over control of the company’s board can be regarded positively by a bank whose loan covenants have been broken. Surely the company must contemplate the risk of the bank considering placing it into administration! Great caution is called for. Those dentists interested can follow the company’s announcements to the Australian Stock Exchange available on the ASX website. Best wishes to all dentists,
GRAHAM MIDDLETON
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