DX Group’s largest shareholder has called for a vote to oust its executive chairman, Ron Series, after claiming his handling of a corporate governance inquiry had “severely harmed” perceptions by investors of the company.
Gatemore Capital Management (GCM) said it had served notice on DX’s board to convene an extraordinary general meeting and replace Series with Mark Hammond, currently senior independent director at Genuit Group and a former chairman of Tuffnells Parcels Express.
GCM said it was “deeply disappointed” by the executive chairman’s handling of the inquiry, which resulted in the resignation of the company’s auditors; a delay of almost 12 months in publication of DX’s accounts; its shares being suspended and around £1.3m of expenses – which GCM said was excessive.
GCM added that since the lifting of the trading suspension this month, the DX share price had fallen by 29% despite an “exceptionally positive operating performance”.
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It said Series must be held responsible for the failings, as well as poor communication and a lack of transparency to shareholders.
The inquiry found DX had failed to take sufficient disciplinary action against employees who had offered a bribe for confidential competitor information and there was evidence that confidential competitor information was obtained “over a period of time”.
The rival competitor was not identified by the report.
Liad Meidar, managing partner at GCM, said: “The removal of Mr Series and his replacement with Mr Hammond is the final step in closing the book on the corporate governance investigation that has cast a shadow over the tremendous operational and financial performance of DX over the past few years.”
In response, DX said its board was “in the process of considering the requisition and Gatemore’s announcement, and a further announcement will be made in due course.”