WA’s annual meeting season finally exploded into action yesterday with shareholders dumping EFTel chairman Glenn Darlington and fellow director Greg Searle during an acrimonious, four-hour confrontation.
About 30 EFTel investors plus a league of lawyers hired by other directors attended the meeting, which dissolved into a fight between opposing board factions for control of the fledgling internet company.
The gathering was marked by accusations over impropriety and cronyism and threats of receivership.
It ended with chief executive Simon Ehrenfeld and his board allies — Paul Stevenage and Jurgen Steinert — retaining control of the board with shareholders re-electing Mr Steinert and voting in Mr Ehrenfield’s close associate Jeremy Cousins as a director.
Mr Ehrenfeld and Mr Cousins hold more than 11 per cent of EFTel through a jointly-owned company, Paradox Investments, and Mr Ehrenfeld holds a further 5.4 per cent in his own right.
The meeting also included bitter arguments over the remuneration report, which delivered hefty bonuses to the board and the senior executive team. The report passed by a slim margin, with 47 per cent of the 123.74 million shares cast voting against it.
The defeated rival camp, which included another non-executive director, Russell Collett, is understood to have been supported by Mr Ehrenfeld’s brother, Danny Ehrenfeld, who holds 9.3 per cent of EFTel.
During the meeting, EFTel managing director John Lane accused Mr Collett’s solicitors of threatening the company with receivership in recent weeks. Mr Collett denied the claim.
EFTel reported a loss of $746,000 for 2006-07. Its auditors, Deloitte, qualified the company’s annual report, saying there was “significant uncertainty as to whether EFTel will continue as a going concern� given current liabilities exceeded current assets by $3.86 million. Deloitte also noted that EFTel was not in compliance with its banking covenants.
Mr Lane said he remained optimistic for the company’s future after yesterday’s meeting.
“Really the result is a vindication for recent commercial decisions of the board, which includes the MSAN (Multiservice access node) project and the PocketSurfer distributorship and I think that everyone, whatever group of opinion, is glad to get it over and done with and now focus on making some money,� he said.
EFTel’s shares added 0.1¢ to 8.2¢ yesterday, marking a 24 per cent increase for the year but the stock has still fallen 50 per cent over the past three years.
EFTel has spent more than $4 million buying three internet service providers since July last year, acquiring broadband communication provider aaNEt, Queensland-based ISP Instant Communications and WAbased Ace Online.
The company services around 140,000 fixed line internet and telephony accounts.
TRACEY COOK
EFT Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
