Highlights from yesterday's excellent AFR article: Ousted Praemium boss rebuts claims
Australian Financial Review
18 Apr 2017
Ousted Praemium boss Michael Ohanessian says that his sacking was a complete shock and dismisses as untrue reports he was routinely aggressive and berated the company's chairman.
He has revealed that a board-led push to hire Flagstaff Partners to advise on the investment platform provider's strategic direction led to simmering tensions between Praemium chairman Greg Camm, the board and Mr Ohanessian spilling over. According to Mr Ohanessian, taking on Melbourne-based Flagstaff would have left him with little control over Praemium's future direction and stifled the $160 million company's momentum. There was also some disagreement over the direction of Praemium's international business.
Mr Ohanessian said that the claims made in the document, particularly the circumstances around a "heated and aggressive" 90-minute tirade directed towards Mr Camm, were untrue. "He [Mr Camm] and I had a robust discussion over some very important strategy matters," he said.
"When you are the incumbent, you control the message and this is obviously a pretty desperate board to say the sorts of things they are saying. Mr Camm's characterisation of our discussion is a misrepresentation. Far from berating him, I met with Mr Camm to try and dissuade him from the new policies he wanted to pursue. My personal view is that I know the board are trying to throw all this mud at me, that's understandable, but the disparaging remarks that they've made is disparaging to the staff and the management as well, and that is why I feel that this board has lost all credibility."
Support is mounting for Mr Ohanessian, with about 18 per cent of the register supporting a move to roll the board. Economist Don Stammer, a significant retail investor with 3 per cent of Praemium, is understood to have said he will vote in favour of the proposal to roll the board.
BlueLake Partners and fund manager Angus Geddes of Fat Prophets also back the push, while it is understood that two other institutional investors have sold out.
Mr Ohanessian said he is comfortable not being given the top job again, despite support from the shareholder bloc to reinstate him. "I've not wanted to be involved in this process. If the new board wants me to come back I'd be happy to because I honestly believe that we had a lot of alignment in the company," he said.
Mr Ohanessian questioned the implication that he resisted a board directive over the hiring of Flagstaff.
"Wanting to debate with him [Mr Camm] the directive is not resistance, that is actually wanting to have a debate," he said. "At the end of that, having failed to dissuade him I actually went and did what the board asked me to do. I executed the contract with the corporate advisory firm."
The Praemium board dismissed Mr Ohanessian in February with Mr Camm saying he "stormed" out of a separation meeting using "abusive language". Mr Ohanessian also disputes this version of events.
"Mr Camm incorrectly stated that in the mid-February meeting they tried to effect an 'amicable and orderly separation'. In fact I was informed at 4pm on February 21 by Mr Camm and Mr Edgley [non-executive director Michael Edgley] that they were announcing my termination the following morning, and I could either sign a separation agreement that evening and leave on good terms, or be fired," he said.
"There was clearly insufficient time for me to obtain independent legal advice. I was not given any real opportunity to leave on amicable terms."
Mr Ohanessian would not comment on whether he planned to take legal action.
Since the notice of meeting members of the shareholder bloc have reiterated their support "In our view, the commentary included in the notice of meeting further highlights to us the poor leadership demonstrated by the Praemium board," Rishi Khilnani, portfolio manager at Paradice Investment Management, told the Financial Review.
"Ultimately, we feel the notice does very little other than to belatedly attempt to justify a series of poor decisions made by the board."
PPS Price at posting:
41.0¢ Sentiment: Hold Disclosure: Held
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