Shareholders Daniel Smith and Nigel Burton had sought to remove chairman John Zorbas and finance director Timothy Jones and install themselves instead, citing some “questionable transactions” and the board’s “indifference” to investor concerns.
Smith, a London-based full-time private investor, and Burton, a former non-executive director of MRS, had also proposed fellow former NED Trevor Brown as a third addition to the board. Burton and Brown both left the board after complaining of “repeated improper interference in the business” by major shareholder Leon Hogan, with the support of Zorbas.
In their exhortation to investors ahead of Wednesday’s meeting in Brisbane, Smith and Burton, who respectively own 7.5mln and 6.5mln shares in the company, had alleged that “many investors have long been suspicious of the relationship” between Zorbas and Hogan.
Zorbas was made chairman of the group in April 2017 after URU Metals (LON:URU), where he is chief executive, built up a stake in MRS earlier that year. Hogan bought his near-8% stake in the company in June of that year.
Burton and Brown said their concerns had come to a head as a result of this year's “astonishing” acquisition of seven-month-old drone surveying startup Alerion, which admitted to never having completed a survey before, for £1.32mln from Hogan’s long-time associated Chris Grove and another individual linked to Zorbas.
Furthermore, the shareholders have attempted to refer a £0.9mln placing last July to the City regulators after objecting to 49% of the shares being allocated to Hogan, Grove and a Canadian-Cypriot consultancy connected to Zorbas.
However, all the motions at Wednesday’s meeting were defeated by 91mln votes to 75mln, with the Hogan’s hulking 7.9% stake bulked up by personal holdings for Zorbas and Grove, plus a 7.9% stake owned by Zorbas's URU.
Hailing the result, chief executive Paul Brenton said: “I am pleased that these resolutions have been put behind us and that the focus can now be on growing MRS successfully for the benefit of all shareholders.”
Following up a board succession plans announced earlier in the month, which included the planned departure of Zorbas, Brenton said the company will “move swiftly” to announce the first of its new Australia-based NEDs, with the intention to add a UK-based director.
Shares in MRS were down almost 17% to 3.14p just after midday on Wednesday.