Brent Robinson is one who can expect a grilling from Rakon shareholders. Photo / Getty Images
Brent Robinson is one who can expect a grilling from Rakon shareholders. Photo / Getty Images
Rakon's annual meeting, scheduled for September 16, looks set to be a fiery one.
In a strongly worded statement sent to the media on Sunday night, Shareholders Association chairman John Hawkins said the company's financial performance had been dismal and investors were "fed up" with the boardroom domination of theRobinson family, who own roughly 23 per cent of the firm.
Brothers Brent and Darren Robinson and their father, Warren, occupy three of Rakon's six board seats.
The association would oppose the re-election of executive director Darren at next month's annual shareholders' meeting, Hawkins said, adding that chief executive Brent was not the right person for the job and Warren, who founded the high-tech component maker in 1967, should voluntarily stand down.
He also blasted the more than 20 per cent pay increases Brent and Darren enjoyed in the last financial year - to $907,892 and $734,605, respectively.
In a statement released yesterday, Rakon chairman Bryan Mogridge said the company shared investors' frustration with recent results and remained fully committed to expanding and diversifying the business.
"We regularly engage with our shareholder base on a range of issues, including governance and company structure, and value their perspective," Mogridge said.
It's a pretty tepid response, given the severe - and long overdue - stance the association has taken against the manufacturer and the power the investor group has in mobilising retail shareholders, of which Rakon has many.
If the Robinsons think this is all going to go away, they'll likely be disappointed.
The board and senior management have presided over large-scale destruction of shareholder value.
Rakon shares - which floated at $1.60 in the firm's 2006 initial public offering and soared as high as $5.67 within a year - closed unchanged yesterday at 22.5c. They have fallen 26.2 per cent since the start of the year.
As Hawkins noted in his statement, circumstances have been hard on the company.
But it has also made some terrible slip-ups, including the disastrous foray into Chinese manufacturing that it raised $65 million from shareholders to fund.
Rakon was forced to exit the factory, in Chengdu, only two years after it opened in 2011.
A $33m loss on that investment contributed to the $83.8m net loss the company reported in the 2014 financial year. The company has only made one annual profit - $3.2m in 2015 - amid total losses of $118.7m over the past five years, according to the Shareholders Association.
There's going to be a fair amount of argy-bargy at the AGM if Rakon doesn't announce big changes before.
