Solomon Lew sets his lawyers on Myer, demanding first quarter results
7 November 2018, Written by David Simmons
Clearly fed up with Myer's reluctance to play ball, Solomon Lew has called on his lawyers to demand some cooperation from the department store giant.
This latest piece of wrath from Lew follows a letter released in late October where the Premier Investments chairman called on Myer to release its first quarter 2019 results.
The content of the letter from Premier Investments' lawyers Arnold Bloch Leibler mirrors that late October threat, but demonstrates Lew's impatience with the quiet Myer board.
Alongside a request for Myer to release its first quarter 2019 results, Premier Investments have asked Myer to explain why they stopped providing quarterly trading updates in May 2018, and whether any third parties have been provided with trading updates since the company went silent.
Lew seems particularly concerned with Myer's involvement with the banks. In late October, Premier Investments said that Myer's deal with the banks was unfair to shareholders.
"To add insult to injury, this sales information and other key metrics are no doubt being provided monthly to Myer's bankers who have recently, for the first time, taken security over all Myer assets as part of a significantly increased cost for their new banking facility," Premier Investments said at the time.
"If the information is key to the banks' assessment of their position, it is equally relevant to the shareholders, suppliers, employees and landlords who have a similar need to assess their positions and futures within Myer."
"How can Myer stop providing information to the market at the same time as handing it over to its banks? How can Myer shareholders be kept in the dark ahead of a crucial vote, when Myer's bankers have all the information in front of them?"
Premier Investment's lawyers highlighted Lew's concerns about the cancellation of the regular trading updates, claiming Myer acted in "bad faith" for its shareholders.
"No reasons were provided for the decision to reverse the historical practice of providing quarterly trading updates to the market," says Jeremy Leibler, a partner at Arnold Bloch Leibler.
"Our client is extremely concerned about the implications of this decision. In particular, it appears that this policy change was made in bad faith for the improper purpose of depriving shareholders of important information while the company's leadership and performance are being questioned. The timing of this decision supports this position."
Lew and Premier Investments, Myer's largest shareholders, are gearing up for the 2018 Myer AGM, to be held on 30 November 2018.
At the 2017 AGM, Myer received its "first strike" from shareholders. If a similar thing happens this year, the Board will face a motion to be spilled.
Premier Investments required Myer to respond to today's letter by 12pm today. As of 1.30pm AEDT Myer has not responded. As such, Premier Investments will likely take further legal action against the department store.
Shares in Myer are up 1.05 per cent to $0.48 per share at 1.30pm AEDT.
Business News Australia
Author: David Simmons