Shareholders of Everest Financial Group have voted against a proposal by financial services company Wingate Group to replace Everest's directors.
Shareholders voted with a 64 per cent majority against the proposal to elect Stockland Capital Partners non-executive director David Kent, Financial Viewpoint director Brett Elvish, and Wingate Group director and head of the Wingate Group Advisory business Franco Dogliotti to the company's board.
Elvish said Wingate's efforts had not been in vain.
"It is important to bring accountability to the company," he said.
Wingate, which holds 19.9 per cent in Everest through Wingate Direct Investments, had sought to replace the board, arguing Everest's financial performance had been disastrous.
Elvish, who addressed shareholders during the annual shareholder meeting of Everest in Sydney yesterday, also criticised the height of management's remuneration, the high establishment costs of new funds and the dwindling funds under management of the company.
Although Everest chairman Greg Martin acknowledged the company's financial problems, he said the company was taking appropriate steps to turn the business around.
"We are looking at a number of capital management initiatives, including taking the business public or in fact even winding the business up if that is in the best interest of all shareholders," Martin said.
Everest is now pinning its hopes on the new Everest Credit Opportunities Fund to attract new business, and the board has given the company until the end of this year to show improvement.
Other major shareholders in Everest are the company's chief executive Jeremy Reid with 19 per cent and private investor Robert Blann, through the Blann Group of companies, with 17 per cent.
"The responsibility is now with the board, backed by Blann, to bring about improved corporate governance, a workable business plan, stem the cash burn and resolve many of the other current problems, including outstanding litigation, within the chairman's stated deadline of 31 December 2010," Wingate Group managing director Farrell Meltzer said.
