re: Ann: CMA Appoints Chairman and CEO as Res...
Ex-CMA chief faces new lawsuit Ian McIlwraith August 31, 2010
SUSPENDED recycling group CMA Corporation has launched a second legal action against the group's former chief executive, Doug Rowe, and several other former employees.
CMA, which is heading into its seventh month without investors being able to trade their stock, claims Mr Rowe and the other defendants are engaging in misleading and deceptive conduct because their new business, SouthernRo, has a name similar to CMA's Southern Rocycling business - which was bought from Mr Rowe for about $40 million several years ago.
When contacted yesterday Mr Rowe, who is overseas and due back later this week, would say only that CMA's latest Federal Court lawsuit was ''their right'', but declined to talk about the specifics.
CMA's earlier legal action against Mr Rowe, also in the Federal Court, claimed he had breached his duties as an executive and director in relation to property rental agreements between the listed company and his private interests. The court documents filed by CMA in that case also said that Mr Rowe had been dismissed as CEO.
German recycling giant Scholz is now not only CMA's largest shareholder, as a result of injecting funds into the struggling group over the past two years, but its chief financial officer, Parag-Johannes Bhatt, was recently appointed chairman.
Even though Scholz has never made a bid for CMA, the German group has effectively taken control, holding three of the four non-executive director positions on CMA's board. There are two executive directors.
The lone independent director is Michael Humphris, an accountant with insolvency and corporate reconstruction expertise.
Yesterday's announcement by CMA made no mention of when it plans to report its results for the year to June 30, which are due by close of business today. Its half-year results were released more than two weeks late in March.
It lost almost $12 million before a favourable tax adjustment in the six months to December 31, and its auditor, Deloitte, noted then that with current liabilities exceeding current assets by more than $20 million, there was a ''material uncertainty'' about CMA.
CMA yesterday offered shareholders no insight on when the trading suspension might end.
Source: The Age
CMV Price at posting:
4.6¢ Sentiment: None Disclosure: Not Held
