A group of “concerned shareholders” have requested an extraordinary general meeting to replace the board of fintech firm Praemium and proposed three replacement directors.
In a letter sent to all Praemium shareholders today, which was also published on the ASX, the activist shareholders said they were unsatisfied with the company's current board.
The move follows the sudden termination of former chief executive Michael Ohanessian on 22 February 2017, which the activist shareholders say was done “without reasonable justification based on the arguments made public by the board”.
“In our view, the board failed to appropriately explain what skill set Mr Ohanessian was lacking, what skill set would need replacing following Mr Ohanessian’s termination and what review process and analysis the board had conducted to come to this conclusion,” the requisitioning shareholders said.
“As a group of concerned shareholders, we have requested an extraordinary general meeting to seek shareholder approval for a change of directors on the Praemium Limited board.”
The requisitioning shareholders, who own a 14 per cent stake in the company through Paradice Investment Management, Australian Ethical Investment Limited, and the Abercrombie group, said the circumstances around Mr Ohanessian’s removal had resulted in a loss of confidence in the board and “substantially increased the operational risk profile” of the company.
Three potential replacement board directors were listed by the shareholders in their letter; SLM Corporate founder Barry Lewin, Australian Association of Unmanned Systems director Daniel Lipshut, and Ellerston Capital non-executive director Stuart Robertson.
“In summary, we believe Mr Ohanessian’s leadership has been a key element of Praemium’s success over the last five years, it is regrettable that the current board was unable to work more constructively with Mr Ohanessian and instead chose to terminate him as CEO,” the activist shareholders said.
“However, given the broader support that Mr Ohanessian appears to have internally and externally to Praemium, the requisitioning shareholders urge all shareholders to support the appointment of a new board.”
Following Mr Ohanessian's departure, the company was led by Greg Camm before Robert De Luca was appointed as interim chief executive in March.