There's been more drama in the battle for control of Tasmania-based baby formula business Bellamy's Australia Ltd (ASX: BAL) today after the company held an extraordinary general meeting to count shareholder votes over a series of resolutions that included demands for the removal of four directors.
The demands were made by the 'Black Prince' foundation an investment group that Tasmanian entrepreneur and significant Bellamy's shareholder, Jan Cameron, is heavily associated with via her business interests.
In total Cameron and the 'Black Prince' are said to control 17.67% of Bellamy's issued capital and after multiple profit downgrades from the company a damaging and drawn out fight has erupted for control of the business.
Recently its chief executive Laura McBain was sacked over the company's performance and today Bellamy's chairman Rob Woolley resigned under intense pressure from the activist shareholders led by Cameron.
Two further directors in Michael Wadley and Charles Sitch were also removed from the board today and effectively replaced by two Black Prince nominated directors. Another director in Laura Inman recently resigned probably knowing she was set to be sent to the naughty corner by upset shareholders.
The lead agitator against the board in Jan Cameron failed to get elected, although she is reported to be intent on pressing for more change at the company in order to get its sales in Australia and China back on track.
Unfortunately the constant boardroom battles over the last three months have been a major distraction for the company in getting back to the business of trying to jump-start its faltering sales growth and margins.
Bellamy's recently reported a 47% plunge in half-year profits to $7.2 million, alongside an operating cash outflow of $23.7 million, with ballooning debt and more than $100 million of inventory sitting on its balance sheet. Many of its problems are self-inflicted, which makes the continuing infighting all the more damaging.
The company also announced today that it is still to have its products registered with the Chinese state to guarantee export rights, although it has until January 1 2018 to strike an agreement.
Investors sent the stock up 4.2% to $4.45 in late afternoon trade probably in approval of the Black Prince's victory and because the company has a little more certainty over its strategic direction. Still given the recent track record, management issues and balance sheet weakness it looks a business to avoid for now.
