Johannesburg - Minority shareholder David Woollam has stuck to his guns and is prepared to go all the way to court in order to force the Lewis Group to make the necessary changes to its board.
Woollam’s battle with Lewis is set to play itself out in the Western Cape High Court from tomorrow as both parties refuse to back down.
Woollam has urged Lewis to address the serious concerns he raised in the letter he sent to the furniture company prior to them taking him to court.
Instead, Lewis filed a notice of motion last Wednesday to stop Woollam from asking the board members to step down.
“It is ironic that Lewis continue to avoid open and transparent discussions around the merits of the various cases brought against them, quoting the age old and misused defence of sub judice, and yet came firing out with this statement, which is a speculative accusation and conspiracy theory aimed at shooting the messenger rather than reading the message,” Woollam said.
Short positions
Lewis Group said Woollam held 10 shares in the company through Summit Financial Partners.
Lewis accused Woollam last week of launching an ongoing campaign against the company in an attempt to drive down the price of Lewis’s shares to opportunistically benefit financially by taking short positions in the stock.
Woollam has denied the accusations and he hit back yesterday saying: “The focus of my campaign has not been to destroy shareholder value, but rather to expose the weaknesses of the existing business model, lack of governance and leadership, failure to address irregular and non-compliant credit practices, as well as misleading and opaque financial reporting.”
He added: “Neither I, nor any of my associates, have a short position in Lewis. My only exposure to Lewis is a small long position in its ordinary shares.”
The shareholder made his request in terms of section 165 of the Companies Act, which enables a shareholder to request that a company commence proceedings to declare its own directors delinquent. In this case, Woollam is seeking to have Lewis chief executive Johan Enslin, chief financial officer Les Davies, independent non-executive chairman David Nurek and independent non-executive director Hilton Saven declared delinquent.
Woollam said his decision to take on the company was “motivated by the need for reform in a consumer finance industry that has seemingly lost its moral compass and has sacrificed the financial well-being of ordinary working-class people in the pursuit of greed. This is at best a short-term strategy, which is incapable of success in the long term.”
The company is prepared to defend its directors in a court case that might drag on for a long time before it is settled.
For years another share activist, Theo Botha, has been at loggerheads with the company’s board over the issue of corporate governance.
CORRECTION: Subsequent to publication, Botha has alerted IOL Business to the fact that it was not Lewis, but rather JD Group, he was at loggerheads with. We apologise for the mix up.
Woollam’s parting shot was to urge the Lewis board to take his allegations seriously, “and make the necessary changes in leadership, governance and compliance, in order to pave the way for a restoral of faith by all stakeholders in the company”.
Lewis’s share price was down 0.99 percent yesterday close at R49.01.
BUSINESS REPORT