If posts on HC are any guide, there is a lot of SH discontent. The vast majority of this discontent is aimed at the highest paid and most senior executive, Mr. Athan Lekkas, Executive Chairman and CEO of XPE.
Athan is the only XPE Director with any ASX Directorship experience and therefore, Public Company Corporate Governance experience. Athan’s own bio on the XPE web site highlights his experience in capital management, manufacturing and logistics. As such, I believe Athan should be held accountable for any decisions and policies within his purview: Corporate Governance and Capital Management.
Whilst I believe Athan has made some good contributions to XPE; the good contributions/decisions are, imo, outweighed by the bad as reflected by the current SP of 1.4c compared to 6.2c when first promoted to Executive Chairman. The SP and imo, SH confidence is either at or near all-time lows.
The latest meeting notice indicates to me, Athan continues to have the full support of the XPE BoD including the 2 largest SH’s and founders, Chris and John. Further, the notice indicates more of the same: more capital raising, more dilution to continue to fund the high cash burn. XPE needs a circuit breaker, imo. Therefore, what are we left to do as SH’s? Assuming one wishes to remain a SH, which I do, there are a few choices:
i. Cop it sweet and by that I mean, say nothing and do nothing;
ii. Continue to whinge; either on HC or emails to Directors or with friends/family. Ultimately achieving nothing other than an outlet to vet.
iii. Take action as a proactive SH.
If i or ii is your preferred choice, then best to save your time and not read any further. If you wish to take action, then I believe the best way to do this is to seek removal of Athan Lekkas as a Director of XPE by S.203D of the Corporations Act: “Removal of a Director by members”.
See:
http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s203d.html
In order to proceed, 5% of SH votes are needed to call a meeting to vote on the removal of Athan Lekkas.
See:
http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s249d.html
For my part, I am willing to give my time to play a role in collecting votes and seeking dialogue with the company to present a unified case. I can be contacted by email.
Please note, I do not act out of bitterness or seek vengeance. Although only you, the reader, can judge this. It is not personal against Athan in the same way Aegian Pal, a Lekkas family company, sold down it’s T20 holding. It is purely business. After talking to others offline, I believe the only solution to break the circuit at XPE, is to hold Athan accountable and seek his removal from the BoD. I care about the company and have previously communicated to Chris about my respect and amazement at the vision he and John had when they set out on this journey.
I seek Athan’s removal as a Director of XPE and subsequent resignation as an Executive because I believe:
1. Athan is under-qualified: unlike the other Directors, Athan’s qualifications are not front and centre in his bio;
2. Athan is over-compensated: I have previously posted comparisons with Athan’s remuneration compared to peer companies such as IAM/RAP. Peer in terms of recent ASX RTO. I have yet to come across an ASX RTO where the most senior executive is being remunerated anywhere near the level of Athan.
3. Athan has a poor track record: see my previous post here for details:
https://hotcopper.com.au/threads/a-...tions-please.3398949/page-13?post_id=24425787
Under Athan’s leadership, the SP has fallen from 6.2c to 1.4c as a direct consequence, imo, of:
1. Poor Corporate Governance
1.1. Lack of Independence: XPE does not have an Independent Director as per ASX Guidelines and is in breach of its own Corporate Governance Policy. Dr. Wenjun is a commercial partner and cannot be Independent;
1.2. Risk Management Committee: See 2.1 below;
1.3. Remuneration & Nominations Committees: see my post under Track Record.
2. Poor Capital Management
2.1. Capital Raising: The CN, announced to the market as a “premium” was executed at a discount. I have previously raised concerns here:
https://hotcopper.com.au/threads/an...ble-security.3341109/page-54?post_id=24154638
2.2. Capital Allocation: XPE has an extremely high cash-burn rate compared to peers. See:
@elphamale post on the same. Executive salaries are comparatively very high. Funds have been used to support an Inventory build-up in the last 2 quarters against low cash receipts resulting a poor Cash Conversion Cycle [CCC]. Going back to Athan’s bio, he mentions expertise in manufacturing and logistics, aka the Supply Chain, of which CCC is the key metric.
I do not hold Athan solely responsible for the current state of XPE. However, I hold Athan accountable as the highest paid executive and the only Director with ASX experience. Apparently Marty wanted additional capital. All well and good. But why attempt to raise at the low? As an experienced Director and former broker, Athan should have known raising at the low would be a poor decision and onerous task. And what happened next? The soph offer/placement was pulled. A destructive CN and a failed SPP. Either way, this one act is a massive fail. Either Athan did not know raising at the lows would be bad or he could not win the boardroom argument. As such, I am calling for removal of Athan as a Director and replaced by a suitable, preferably Independent Chairman. A Chairman who is willing and able to look after the interests of all SH’s.
I have made my case and given my fellow SH’s a potential course of action. Previously SH’s made a stand against incentives and forced them to be pulled from a vote. You may agree/disagree in part or full with my reasons and/or have your own. If, as a SH, you would like to take action, then please get in touch. If not, let’s all continue to vent on HC.
(20min delay)