More Opes fallout: Jumbuck director pushed
Monday, June 23, 2008/
Paul Choiselat, who resigned this morning as director of small listed wireless messaging company Jumbuck Entertainment, says he is concerned about the future direction of the company without his experience on the board.
Choiselat lost his controlling stake in Jumbuck when the ANZ bank sold his shares following the collapse of Opes Prime. Choiselat, who resigned as managing director on 30 May, was due to face a vote today at a specially convened extraordinary general meeting that could have seen him removed as a director.
“When I became aware of what the numbers looked like for the EGM, I was going to lose by a small margin and decided that rather than have a stoush in public, which would not be good for Jumbuck or good for me, it would be better to resign,” he told SmartCompany this morning.
He says he was very disappointed to resign as a director. “It was based on other things than commercial reasons,” he says. “I put a lot of time and effort into growing Jumbuck. It was an opportunistic move caused by the Opes Prime/ANZ matter.”
He says that when he started as managing director it was making losses. “We made $5 million of net profit after tax last financial year,” he says. “Brokers are forecasting continued upward slopes in profits and revenues.”
He says the reasons given for pushing for his resignation did not make “commercial sense”.
“The prime reason given was that because of the Opes prime situation I did not have enough time to do my job properly. They also said there was a conflict because I am suing the ANZ bank and the ANZ bank is Jumbuck’s banker.”
(Choiselat’s company Beaconwood Securities is running a test case in the Federal Court against ANZ, claiming the bank, after the Opes Prime collapse, had no right to sell his shares which were put forward as collateral for margin loans.)
“This is not going to improve the company. They will lose my knowledge. That will take away six years of experience and have an impact on the company going forward,” he says.
Chairman of Jumbuck, Kevin Campbell, says Choiselat had been a great contributor and his skills had complemented that of other board members (which include Jeff Kennett).
“He had an investment banking analytical background and was a conduit into other possibilities for the company, including mergers and acquisitions,” he says. “The company will need to consider its diversity of skills.”
Campbell says that shareholder Quad Holdings, which has a 9.6% stake, had pushed for the EGM. “I think the issue was the time he had to spend on the company as he has a very busy schedule. I don’t think the ANZ is a problem because after all there would hardly be a company in Australia that did not have a banking agreement with the ANZ.”
He also pointed out that Choiselat’s company had provided a very good service (including the provision of company secretary and other financial and corporate contributions) to Jumbuck when it was a start-up micro-cap.
“But it didn’t have the infrastructure required to service a publicly listed company. The board always intended to bring that (agreement) to an end,” he says.
Campbell says the company is going well. “We just need to get these meetings behind us.”
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