NZ Automotive Investments owns the nationwide chain 2 Cheap Cars. Photo: Facebook / 2 Cheap Cars
NZ Automotive Investments (NZAI) largest shareholder remains tight-lipped about the ructions that caused the company's board to implode, after being grilled by investors at its annual meeting.
As expected shareholders voted overwhelmingly (99.8 percent) in favour to elect independent directors Michael Stiassny, who is the company's chair, and Gordan Shaw to the board.
Samantha Sharif would serve as independent director on a temporary basis while Shaw would serve as acting chief executive.
The pair were nominated by the company's remaining director and major shareholder, David Sena, after four non-executive directors, including one of its founders, resigned in July citing a "fundamental breakdown of trust and confidence" and "irreconcilable differences" with Sena after he notified them that he planned to have them replaced.
At the time, Sena said he wanted directors who had the expertise to turn the business around and help it grow.
The ructions had a significant impact on the company, as its bankers warned it was at risk of losing financial support and its auditor, Grant Thornton, resigned.
Shareholder seek answers
Sena was the subject of intense questioning from shareholders at today's meeting about the breakdown of the company's previous board.
He was asked to explain why the independent directors he proposed to remove were responsible for the businesses' poor performance.
"I don't wish to comment on the previous board disruption," Sena said, "All I can say is that when company performance began to decline we disagreed on how to stop it."
Another asked Sena if he would step down as a director at next year's annual meeting if the company's finances did not improve, given that was why he wanted to replace the former board.
Sena reiterated he did not wish to comment on the previous issues, adding that he respected the new board, their skills and that he believed they would work effectively together.
He also said he planned to occupy the chief operating role for six months and ruled out putting his hat in the ring to be the next chief executive.
Shaw and Stiassny were asked about why they took up their roles, given the previous directors' concerns.
Shaw responded that they had both done their due diligence and felt they had the skills to turn the company around and rebuild shareholder value.
He said they were both confident they could work with Sena.
"We have been very clear with David about how the new board will operate and our expectations around proper governance."
Shareholders' Association backs new board
The Shareholders' Association (NZSA) said the company was in a much better position now that it had a fully independent board.
Chief executive Oliver Mander told RNZ the appointment of Shaw and Stiassny had alleviated its concerns.
"I think the fact there is an independent board there with a very functionary experienced CEO, albeit on an interim basis, that acts as a check and a balance in terms of what David Sena is able to do."
It would be interesting to see how Sena would act in the year to come but it was unlikely he would repeat the actions of the past, Mander said.
'NZAI has underperformed'
NZAI's recent trading update for the first four months of the current financial year showed the effects of inflation pressures and difficult trading conditions.
In his opening remarks company Stiassny acknowledged the recent turmoil that had overtaken the business and the significant impact it had on shareholders.
"In the simplest terms, your new board understands that NZAI has underperformed and this must be remedied for the benefit of all shareholders," Stiassny said.
"The new board was constituted less than two weeks ago, and we are intent on stabilising the company as quickly as possible."
Shaw, who was only appointed to the acting chief executive role on 26 August, said he had a "constructive" meeting with company's bankers but offered no further update.
The appointment of a new auditor was expected to be announced in the next month, he said.
Shaw said the board was "carefully examining and re-calibrating the core business" which he hoped would result in improved financial performance and shareholder value.
"We are also carefully reviewing the company's management and organisational structure to ensure it is appropriate for the size and scale of the business, that it is cost-effective, and that it enables the company to operate efficiently."
A search was underway to find a new chief executive, he said.