A bitter boardroom battle led by former CEO and company founder Tony Nash at online book retailer Booktopia has resulted in a complete rout of non-executive positions with the company’s four independent directors including the chairman tendering their resignations.
The latest development is a major win for Nash who has been agitating for more than a month to install new directors to the company he established 18 years ago.
Despite achieving his goal of wiping the slate clean with the installation of a new board, Nash says he has no intention of taking an executive role and plans to work towards a smooth transition of leadership at the company.
Nash was dumped by the Booktopia board in July following a tough year for the online retailer which experienced a drop in underlying earnings in FY22 as the bottom line was hit by restructuring costs in the wake of a challenging business environment. The third quarter especially saw a sharp fall in EBITDA of 63 per cent compared to a year earlier.
The company’s shares have suffered along the way, decimated from highs around $3 in August last year to a low of 16.5c in July when Nash was sacked.
Nash may have been placed on ‘gardening leave’ since his departure, but that hasn’t stopped his campaign to bring new talent to the company’s board.
Through his 5 per cent shareholding in the company, Nash last month called for an extraordinary general meeting to put his case before shareholders for a change of directors.
Nash not only wanted the removal of anyone appointed to the board after 17 August 2022, but he also sought to appoint former forensic accountant Abigail Cheadle as non-executive director. Cheadle is currently non-executive director of listed fintech Novatti Group (ASX: NOV).
“Since that time, the independent directors of Booktopia have discussed various options with Tony Nash regarding the board composition,” says the company in a statement to the ASX today.
“The two priorities for these discussions have been having a quality independent board and ensuring a good transition and stability for the company. As nothing has been able to be resolved, the four independent directors have therefore decided to resign.”
Su-Ming Wong’s resignation from the board is effective from today, while Fiona Pak-Poy, Judy Slatyer and chairman Chris Beare will resign at the AGM on 28 November 2022. The company says Beare will step down as Booktopia’s chairman as soon as a new chairman is elected.
“In the interim, the remaining directors will work with Tony, management and the board to assist in a smooth transition,” says the company.
After being pushed out of the CEO’s role in July, Nash appeared to accept his fate with a LinkedIn post on the night of his sacking declarling that he chooses to be ‘better rather than bitter’. The board at the time said it was ‘not in the best interests of the business to retain Nash as Booktopia’s ‘chief growth officer’ when it was searching for a new CEO to lead the company.
A statement by Nash released today appears to agree with that sentiment, although he also notes that the ‘transition from a private to a public company is never easy’.
“I intend to remain as a non-executive director of Booktopia and will not be resuming an executive role with the company,” says Nash. “The company will now undertake a search for new non-executive directors, one of which will be appointed chairman.”
Geoff Stalley, the company’s CFO, was appointed as the interim CEO in July pending a permanent replacement.
“The recruitment of a new CEO is progressing well, and the resolution of recent board issues is expected to assist in this process,” says Nash.
“Booktopia is bestowed with a talented leadership team that have been empowered to meet the future plans for the business. We are looking to complement them by recruiting an equally capable CEO and new independent non-executive directors.
“I am looking forward to working with the new directors and supporting the new CEO to ensure Booktopia reaches its full potential.”
Nash is not expecting any change in the strategies detailed in its recent corporate review, including the transition to a new customer fulfilment centre in Sydney which is expected to be opened by Christmas.
“We will continue to pursue profitable and sustainable growth in the interest of all shareholders,” says Nash.
“Booktopia is an iconic Australian company. It's been a David and Goliath story. No other country in the English-speaking world, other than Australia, has a significant alternative to Amazon when it comes to selling books online.”
The e-retailer was established in 2004 by Nash, his brother Simon and Steve Traurig and the company listed on the ASX in December 2020. The company’s share value reached a peak of about $400 million last year, but now sits at $35 million.
Booktopia is currently facing a $6 million agreed penalty against it following action brought by the Australian Competition and Consumer Commission in relation to its returns policy which contravened consumer law. The agreed penalty will be put to the Federal Court in December 2022.
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