The new board of ASX-listed, Melbourne-based platform services provider Praemium has today issued a statement saying that a “comprehensive review” it had conducted of its recently-reinstated CEO had found his dismissal had been “inappropriate” and “not based on reasonable grounds”.
The new board, led by chair Barry Lewin, said it had reviewed board minutes, statements by the previous chairman, and various other communications, while also considering the performance of Praemium’s share price during Ohanessian’s time as CEO, in reaching its conclusion.
In its statement, the Praemium board also noted that as a result of terminating Ohanessian’s employment back in February, the company had incurred costs totalling A$972,000, which included the engaging of corporate and legal advisers, public relations, registry, investor engagement, government support services and the hiring of an interim CEO.
Arranging for and holding a shareholders’ meeting on 12 May, which led to Ohanessian’s reinstatement, accounted for some A$29,000 of the total figure, the statement said. All of the costs would be accounted for “as one-off costs (below EBITDA) in the 2017 financial year”, it added.
Lewin said the board was “very pleased to reiterate its support” for Ohanessian, pictured above, and added: “We look forward to working with him in continuing to drive growth and value for shareholders.
“Michael is a talented executive with strong integrity, who has led the management team over the entire period of the transformation of Praemium, which has also provided the company with substantial opportunities. He has our complete confidence.”
As reported, Ohanessian’s dismissal in February, after five years as CEO, came just a week after the company had delivered a 39% EBITDA growth in its half-year results, and resulted in a backlash by certain shareholders that some observers said was one of the most unusual boardroom battles ever seen in Australia.
Following pressure from these shareholders and Ohanessian himself, Praemium formally acknowledged a “shareholder request for [a] meeting”, at which the then-existing board was replaced with the current one and Ohanessian was reinstated.
The outspoken shareholders included Paradice Investment Management, the Abercrombie Group, and Australian Ethical Super, which together hold about 17% of Praemium’s stock.
Praemium was founded in 2001 in Australia by Arthur Naodoumidis, a former IT consultant, and listed on the ASX in May, 2006. In addition to Australia, it maintains offices in Jersey, Hong Kong and the UK, where it has been present since 2008.
It specialises in separately-managed investment accounts, and says it currently has more than 300,000 active investor accounts, in addition to looking after more than 700 financial institution clients.
Last year it acquired Wensley Mackay Ltd, a UK SIPP provider.