The owner of Madison Financial Group has found itself in the middle of an internal coup, as a company owned by one of its executives brings forward a shareholder vote to oust the group’s former acting chief.
Clime Investment Management announced last month that an extraordinary general meeting of shareholders would be held on 6 August to vote on a resolution that a director of the group, Neil Schafer, be removed.
According to the meeting notice, two of the company’s four board members are in favour of the resolution, including current chair John Abernethy.
In a letter to shareholders on Monday, Mr Schafer said the shareholder who had made the resolution, Locope Pty Limited, was “an entity whose corporate officers included” Clime portfolio manager Ronni Chalmers.
“I was first made aware that Ronni Chalmers was seeking my removal via his email to me, without any prior discussion from him,” Mr Schafer said.
“When this occurred, I was shocked for a number of reasons. I have served diligently as an independent director on the board since January 2011. During this period, I have strived at all times to add value to the company and its shareholders by pursuing ethical and effective corporate governance.
“The most concerning aspect of the resolution being put to shareholders is the lack of any explanation or reasoning behind it.”
The news follows the abrupt departure of Rod Bristow as chief executive of Clime in November last year after two years in the role, and the resignations of former chairman Donald McLay and director Allyn Chant in October 2020.
The group had also acquired advice licensee Madison Financial Group from OneVue in October last year, with former Madison head Annick Donat recently ascending to the role of Clime CEO.
Mr Schafer, who stepped in as acting CEO following Mr Bristow’s departure, said he did not understand “why a shareholder would unilaterally seek to remove me”.
“As recently as last November, I was overwhelmingly re-elected as a director by shareholders to serve a further term. Since my re-election, the company has been performing well,” he said.
“One key financial goal was the achievement of a sustainable pre-tax profit/revenue margin of 25 per cent. The results of that strategy are a matter of record as evidenced in the company’s ASX announcement of 21 July.
“Given these accomplishments, why is this EGM being called by a shareholder controlled by an executive member of staff? Does it pass the test of being in the best interests of the company? Is the cost to shareholders and disruption to the company caused by this EGM for personal rather than corporate benefit?”
Mr Schafer said ahead of the EGM, shareholders should “seek answers from the involved parties and come to their own conclusions about what reasons those parties have for pursuing this course of action”.
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