Boardroom battle at CustomVis

THE Perth-based chairman and managing director of UK-listed CustomVis plc have been challenged by a group of shareholders who want to gain control of the technology company.

The dissident shareholders are targeting company founder and managing director Paul van Saarloos, who formerly worked at the Lions Eye Institute, and chairman Simon Carroll, who has been in the role just seven months.

Under their leadership CustomVis is commercialising an innovative eye laser technology, but is still losing money eight years after being established and six years after listing on the London Stock Exchange's Alternative Investment Market.

The company has responded to demands by the dissident shareholders and agreed to hold an extraordinary general meeting in London next month.

The shareholder group has called for the dumping of Messrs Carroll and van Saarloos and the appointment of three replacement directors.

The proposed new directors include Simon Gordon, who was managing director at the time of the AIM float in 2003, and Hugh Grant, who was finance director at the time.

In a letter to shareholders, sent last Friday, the current board recommended that all the changes proposed by the requisition group should be rejected.

The letter says the requisition group represents the interests of Mr Gordon, former chairman William Colvin and former executive director Mukesh Jain, with whom the company is in a legal dispute.

"The plan outlined by the requisition group is similar to the strategy put forward in 2003, when ... there was significant expenditure and substantial loss of share value," the letter states.

One of the key points raised in the letter is that the 2003 strategy took the company's flagship product, the PulzarZ1 laser, to market prior to resolution of all technical issues.

This strategy had been opposed by Dr van Saarloos, and resulted in increased rectification costs to meet regulatory approvals.

The letter states that there have been major changes since Mr Carroll was appointed chairman last November, including redefining its terms of trade and introducing new worldwide distribution channels.

"The company has seen a significant reduction in cash burn rates, a significant increase in revenue and is making good progress towards becoming cash-flow positive," the letter states.

It has an installed base of 40 lasers worldwide and has previously claimed it will become cash-flow positive without having to raise further capital.

"The requisition group are critical of the board and management, however, in the opinion of the board, they appear to offer little or no alternative strategy to take the company to the next stage of its development," the letter concludes.

The campaign by the requisition group has sparked keen trading in CustomVis stock, which has fluctuated between 0.4 pence and 1.9 pence.

The requisition group, which uses the web site rescuecv.com, stated that it has no pre-determined plan to close down any operations or reduce any staff numbers.

It noted that sales of eye laser machines achieved by the company fall short of the three sales per month that management has previously described as being needed to be cash-flow positive.