There have been dramatic changes to the board of scaffolding and formwork company IFS Construction Services, which has appointed three new directors associated with Singaporean shareholder Millenium Scaffolding Systems.
There have been dramatic changes to the board of scaffolding and formwork company IFS Construction Services, which has appointed three new directors associated with Singaporean shareholder Millenium Scaffolding Systems.
The changes had been vigorously opposed by the company's former directors, who argued that they amount to a "takeover by stealth".
The company announced today that director Bily Ong has been appointed executive chairman, and that Anita Ong, Michael Fisk and CFO Stuart Usher have been appointed as directors.
Chief of operations Doug Weir continues as an executive director.
The new appointments follow the resignation of former chairman Bill Ryan, former managing director Scott Williams and director Ian Spence.
"The three directors who have resigned today find the continuation of their directorships with the company untenable," Mr Williams said in a statement.
"The company's 20% shareholder Millennium is seeking 100% control of the Board and in order to achieve that has commenced Supreme Court proceedings against the company and against the directors personally, and has requisitioned an EGM seekng the removal of 3 of us and the appointment of 4 of its nominees in our place.
"The 3 resigning directors do not consider a public dispute in the interests of the company or the shareholders and have resigned accordingly."
The board changes follow a weak trading performance by the company, which reported a slump in revenue to $10.2 million for the half-year to June 2010 and a net loss of $661,000.
Its shares are currently trading at four cents per share,
In a notice of meeting sent to shareholders on 1 December, the three directors who have since resigned outlined their reasons for opposing the changes.
"This will give Millennium, already the single biggest shareholder and the major supplier of formwork and scaffolding equipment to the Company, effective board and management control without having to make a takeover offer or pay shareholders a takeover premium," the norice stated.
"We are concerned that Millennium may use this control to cause the Company to buy equipment exclusively from Millennium and prevent the Company purchasing equipment in the market at a competitive price in the best interest of the shareholders."
They said that the new directors cannot be considered independent: Billy Ong, a director of the Company, is a major shareholder of Millennium; Mrs Ong, a proposed director, is Mr Ong's wife; Michael Fisk, a proposed director, is a business partner of Mr. Ong in Millennium; and Doug Weir, a director of the Company, "has consistently acted as requested by Mr Ong and cannot be considered independent of Millennium".
"We are concerned that Millennium's call to remove us may have been triggered by Mr Scott Williams raising concerns at a board meeting in September 2010 about the performance of Millennium as a supplier to the Company.
"At the next board meeting of the Company, Mr Ong asked Mr Williams to resign as managing director."
Evan Zannis, who owns Victorian scaffolding company Omniform Consulting, was proposed as a new director but did not join the board.
