In the latest chapter of the drama that is Bubs Australia 2023, the board has called an Extraordinary General Meeting for shareholders to vote on a resolution to oust the current board.
In a year that can only be described as feisty with a side of surprise for the infant formula manufacturer, a faction of shareholders led by the company’s founder and former CEO Kristy Carr and former executive chair Dennis Lin is seeking to sack the current board and replace them with its team of Peter Nathan as CEO/MD, James Jackson as chair, and Rupert Soar. Two female board members will be appointed using a third-party recruitment firm.
The Save our Bubs group hold 5.04 per cent of the company’s capital and have told shareholders Katrina Rathie (chair), Paul Jensen, and Reg Weine, “lack relevant experience and are presiding over the destruction of our great company”.
“The current board summarily sacked top executives and lost the support of Bubs’ founder, taking control of the board and management without a transition plan for a new CEO, CFO or business strategy,” it said.
Neither Carr or Lin is looking to be reinstated but said they would “facilitate a seamless transition of their business intelligence and customer relationships and support the business in a strategic advisory capacity if required in the future”.
That all was not well in April, when Lim was stood down from his executive roles because of Bubs’ poor financial results in China and differing opinion on the best strategy for the lucrative market. Katrina Rathie became chair and Reg Weine joined the board a couple of months after Paul Jensen. Carr took a month’s personal leave, which ended with her and Lin being sacked for failing to follow board instructions in May.
Meanwhile, Richard Paine has been acting CEO.
The board doesn’t support the proposals, saying that recent director and leadership changes were necessary due to the “significant deterioration in Bubs’ recent financial performance, undisciplined expenditure and the long-term decline in shareholder value presided over by the ex-chair and ex-CEO including failing to comply with reasonable board directions”.
“In the three-year period to 10 May 2023 (date of CEO termination), Bubs’ share price declined 84.3 per cent from $1.175 on 11 May 2020 to $0.185 on 10 May 2023.
“Since the company’s IPO on 3 January 2017 and during the tenure of Dennis Lin and Kristy Carr, the company has accumulated losses of $240 million and raised capital seven times, with investors in each of those capital raisings suffering a material decline in the value of their investment, ranging from -59 per cent to -81 per cent,” the board said.
