Dissident former Bubs Australia executives have been defeated in their attempt to change the make-up of the infant-formula and baby-food maker’s board.
In an announcement to the Australian Securities Exchange (ASX), Bubs Australia said all the group’s resolutions were voted down today (27 July) at an extraordinary general meeting.
Bubs Australia has been under fire from a grouping including founder and former CEO Kristy Carr and ex-chairman Dennis Lin. They were dismissed from the business earlier this year. The duo, alongside former CFO Iris Ren, have been critical of the company’s performance and have called for board-level changes.
In its ASX announcement, Bubs said the results of the voting were “a clear vote of confidence in the current Bubs board”.
Bubs Australia chair Katrina Rathie said:“We are delighted with the result and thank each and every one of our Bubs shareholders, customers, suppliers and employees for their continued loyalty and support.
“Approximately 48% of our institutional and valued individual shareholders voted. This is an excellent voting turnout for Bubs that reflects well on our shareholders, demonstrating a high level of engagement and interest in the company’s future direction.”
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Bubs Australia’s current board was backed by more than 70% of those who voted, the company said, which insisted it now has a mandate to deliver on its strategic plan.
Earlier this month, the group launched its renewed strategy, which has a particular focus on the US – a market the company sees as a major growth opportunity – and its ailing China operation.
Reg Weine, a non-executive director at the company, who led the review alongside peers Paul Jensen and Steven Lin, revealed Bubs Australia had delivered accumulated losses of A$240m ($160.4m) since the company’s IPO in January 2017. He said investors had seen a “material decline in the value of their investment of 59-81%”.
Weine argued the company had “a complete lack of accountability and focus”.
Bubs Australia said in its ASX statement today: “We acknowledge there is a lot of work to do, there are significant challenges as well as great opportunities ahead and that shareholders expect to see a reversal of the company’s performance over the past two years.”
The company, which said it had put in place “much improved” board governance structures including an independent audit and risk committee, revealed it expects to appoint a CEO next month. Chief operating officer Richard Paine is acting as interim chief executive.
The dissident shareholders were aiming to remove Katrina Rathie, Steven Lin, Paul Jensen and Weine as non-executive directors of the company and appoint James Jackson, Peter Nathan and Rupert Soar in their stead.
Former CEO Carr, who founded the business in 2005, was sacked in May for failing to comply with “reasonable board directions”. Lin, who stepped down from the role of executive chairman at the Sydney-based company in April, was also dismissed.
CFO Ren quit the business soon afterwards.