A 23-page notice of the date for a promised general shareholders meeting of Praemium, posted on the Australian Securities Exchange’s website today, includes a lengthy explanation of why the Melbourne, Australia-based company terminated its chief executive of five years, Michael Ohanessian, in February.
The explanation is aimed at encouraging Praemium shareholders to vote in favour of keeping the existing board, rather than joining a group of dissdent shareholders keen to replace it.
Towards the end of the document, which notes on its first page that the meeting will take place on 12 May in the ballroom of a Melbourne hotel, at 11 am, Praemium chairman Greg Camm provides a 512-word “response” to statements by that dissident group, which, as reported, has called for Ohanessian to be re-instated, and for the existing board to be replaced.
The shareholders argued that Ohanessian was asked to leave just a week after the company had delivered a 39% EBITDA growth in its half-year results, and said he had been responsible for Praemium’s strong recent growth.
Praemium responded on 22 March that it would set a date for the requested meeting, “during the second week in May at the latest”, during which a vote on the board would take place.
In his statement today, in which he seeks to convince shareholders to vote against removing Praemium’s directors, Camm said that even before he actually he joined Praemium’s board as chairman last October, he had been warned that relations between Ohanessian and the board had been difficult “for some lengthy time, and were getting worse”. He said he had been determined to improve the relationship between the CEO and the board, but that it “became clear from the outset that Mr Ohanessian was not willing to make the changes in his behaviour necessary to effect this improvement”.
In the statement, Camm detailed a particular incident that he said had happened in early January, which he said contributed to the decision to issue the statement that the company eventually did, on 22 February, to the effect that Ohanessian had been “terminated”.
Ohanessian, who was named managing director of Praemium in 2012, wasn’t immediately available for comment.
However, his lawyer, Arnold Bloch Leibler partner Jeremy Leibler, said: “For the incumbent board to cry foul about corporate governance is the height of hypocrisy. This is the same board that recklessly disregarded the will of its shareholders and terminated the CEO without cause or consultation.
“Unfortunately, the incumbent board has learnt a critical lesson about corporate governance: you can’t sack a premiership coach for no reason and expect the support of your fan base – no matter how you justify it after the fact.
“The proposed directors have been nominated by Paradice, Australian Ethical and the Abercrombie Group. Any attack on their independence is blunt and unimaginative. The proposed directors are professional and committed to implementing a higher standard of corporate governance.”
International platform market
Praemium was founded in 2001 by Australian 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.
Last year, as reported, it acquired Wensley Mackay Ltd, a UK SIPP provider.
In February, Praemium reported a record profit for the six month period to the end of December, helped by reduced losses in its international businesses, and “record inflows” in the half, and said it was administering funds globally of some A$5.4bn (US$4.14bn, £3.33bn).
Its offerings to financial advisers include a white-label platform service; an in-house investment manager that provides risk-rated multi-asset portfolios called Smart Investment Management; a “separately managed accounts” facility; and a
a proprietary CRM system called Wealthcraft,which it obtained via an acquisition of a Hong Kong-based company of that name in 2012.