Blue Sky MD and executives resign in the wake of Glaucus saga
Written on the 23 April 2018 by David Simmons
A number of high profile personnel at Blue Sky Alternative Investments (ASX: BLA) have resigned in the wake of the Glaucus report which wiped out the company's share price.
Robert Shand, managing director, has resigned and will be replaced by interim managing director Kim Morison.
Executive directors Elaine Stead and Nicholas Dignam will also step down from the board, but will continue in their executive roles in the business.
The company has started the search for a permanent managing director as well as new independent directors to fill out the board.
John Kain, the chairman of Blue Sky, says the resignations come as part of the company's plan to rebuild investor confidence.
"In offering his resignation, Robert agreed that as Blue Sky rebuilds market confidence, it was in the best interests of the company, its shareholders and its investors for Kim to take over as interim Managing Director," says Kain.
Morrison has been the managing director of Blue Sky Water Partners and head of Blue Sky's real assets business since 2010, as well as an executive director of the company.
Morrison says he hopes to rebuild public confidence and restore the reputation of the investment company.
"We have learnt, and we are continuing to learn, from our recent experiences and we are building for the future," says Morrison.
"Blue Sky will accelerate initiatives to recalibrate Blue Sky's income mix toward a greater reliance on recurring cash income. We will also continue to develop new investment opportunities and we are well placed to do so given the strength of our balance sheet."
"I am committed to ensuring Blue Sky strengthens its governance and transparency to our shareholders and investors in order to restore and build confidence among all of our stakeholders."
The Brisbane-based company's share price has plunged in recent weeks as it deals with the fallout from an attack by short seller Glaucus Research which last month released a negative report on Blue Sky.
Glaucus alleged Blue Sky had "wildly exaggerated" its assets under management (AUM) and said its correct share price valuation was around $2.56. That report sent Blue Sky's share price plummeting from $11.43 on March 27 to $3.46 at the close of trading on Friday.
The company downgraded its full year guidance and its AUM in April as it announces an independent review of its business processes and financial reporting. Blue Sky revised its fee-earning AUM guidance for FY18 from $4.25 to $4.75 billion to $4.0 to $4.25 billion and underlying net profit after tax guidance from $34 to $36 million to $20 to $25 million.
The company is also subject to a potential class action being led by Gadens stemming from the Glaucus accusations. The firm is currently investigating whether Blue Sky has failed to comply with their statutory obligations and have misled the market.
BLA shares have fallen a further 4.33 per cent today and are currently trading at $3.31 (time of writing, 11:37am AEST). On 27 March 2018, the company's stock price was $11.43.
Business News Australia
Author: David Simmons