(Alliance News) - Iodine maker Iofina PLC on Tuesday slammed an attempt by shareholder Arron Banks to remove its non-executive chair.
Banks was one of the founder of the Leave.EU campaign in the UK and poured significant funding into the UK Independence Party.
Rene Nominees IOM Ltd A/C POOLED, on behalf of South Rock Insurance Co Ltd and ICS Risk Solutions Ltd, on Monday called for a meeting of shareholders to vote to remove Non-Executive Chair Lance Baller and appoint Banks, who owns 14% of Iofina, to the board.
A week ago, Iofina said no such meeting had been requisitioned. Baller is a co-founder of Iofina and was chief executive between 2010 and 2013, stepping down for health reasons.
London-headquartered Iofina said it is "surprised" by the requisition of the meeting, given Banks has been a "long-standing supporter" of the company. It feels his statements, including several Twitter posts, are flawed and are a reaction to Iofina's decision to not invest into a hemp project in Belize with which he is associated.
It is currently seeking advice over the validity of the requisition, with no date for any general meeting set.
The company said performance under the current board, including Baller, has been "excellent". Operations have expanded while costs have reduced. Between 2013 and 2019, crystalline iodine production more than quadrupled.
In its most recent results, published in September for the first half of 2019, Iofina's pretax loss more than halved with revenue rising 28%. Production of crystalline iodine rose 8.6%.
Banks has accused the firm of "badly executed" expansions of iodine plants with high costs, which Iofina said is incorrect. Iofina also said some of his accusations refer to actions under previous leadership, which have been rectified by the current board.
Banks also criticised Iofina's debt reduction plans. Iofina said it is talks with several possible debt providers to restructure its debt and with earnings growing "significantly" the company believes it is in its strongest-ever position to renegotiate debt.
Another criticism levelled by Banks refers to Iofina's investment into Colorado-based hemp seed producer Organic Vines, as part of a plan to move into the hemp products market. Iofina noted the investment could well deliver the maximum return achievable, and also said Banks was publicly supportive of the investment at the time.
Iofina believes Banks's behaviour is due to the fact it decided not to invest into a hemp project in Belize, "which he was associated with".
Iofina between July last year and February this year looked into expanding its hemp business into Belize. However, it said Belize's hemp regulations remain opaque and not the same as those in the US.
The firm was given "differing and often conflicting" information in Belize, and Iofina eventually decided not to begin any business in the country.
"The events following the board's decision not to proceed with any operations in Belize are instructive. Almost immediately following the communication on February 21, 2020, of that decision to Banks, members of the board began to receive messages from him threatening to requisition a meeting calling for their removal," said Iofina.
"In summary, the board is disappointed by Banks' behaviour and considers his actions to be both disruptive and damaging to the company, its shareholders and its stakeholders."
"Moreover, the board is of the view that the statement made by Banks and the proposed resolutions serve to promote his interests and those of his business associates, not necessarily to the benefit of the company and its other shareholders," it added.
Iofina shares were 0.8% lower on Tuesday morning in London at a price of 18.95 pence each. They have risen 41% over the past 12 months.
By George Collard; georgecollard@alliancenews.com
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Iofina (IOF)