I’ve never bothered specifically talking about Optiscan (ASX : OIL) because from a technology vantage, there is nothing to say. This is a company that may have once had an opportunity to do something useful but that time has well-and-truly passed. One could argue that OIL was never really suited to being a public company anyhow (partnered deals for a “platform” technology) but even so, it has become the archetypal “zombie” ASX company, and I hate them.
I hate them passionately.
What I also hate is shoddy corporate governance, and this is a company that leads the pack in terms of sloppy, shonky behaviour – particularly by a chairman who should know better. Since late 2012, Mr Angus “Gus” Holt seems to have simply been unable to conduct himself in a matter befitting of a director of a public company, and an executive chairman no less. In fact, behaviour that effectively amounts to insider trading seems to have continued up until 2014 when (and I quote) Mr Holt informed the ASX that he had “instigated enhanced reporting arrangements with his broker“, as though somehow the responsibility for integrity and honesty lies with his stockbroker, instead of himself.
Obviously, in hindsight, those measures didn’t work, did they? I should note, however, that the risk of this kind of appalling behaviour does not lie squarely on the shoulders of Mr. Holt, in fact the directors of the company had previously informed the ASX that processes would be put in place to better manage regulatory compliance. This means that if Mr. Holt is sued (which he should be), then other directors are also at personal risk and appropriately so. I have previously commented that it is only a matter of time before we see litigation funds and class-action suits in our sector and it is precisely this kind of attitude that puts our biopharma/healthcare sector at risk.
Let us be clear, despite today’s rosy-ish announcement, Mr. Holt is not standing down because of long and illustrious service to an excellent public company. He is standing down because over at least a three year period, he repeatedly demonstrated a lack of judgement unbefitting of a director of a public company. Indeed, I would argue that all of the “members” are unfit to be public company directors based on the recent ASX treatment of Mr. Holt’s failure to lodge timely regulatory documentation on the basis of “materiality”. Public company governance is not about materiality, it is about the absolute commitment to legal compliance and serving in the best interest of the company and its shareholders. It is called fiduciary duty and it comes before personal gain. As such, Mr. Holt’s breach of s205G of the Corporations Act and ASX Listing Rule 3.19A for personal tax optimisation reasons, is a breach of fiduciary duty and Mr. Holt should expect commensurate legal repercussions for his indiscretion. Mr. Holt’s complete lack of regard for the concept is even reflected in the 3rd of July notice, where Mr. Holt simultaneously disclosed his intention to take up his full entitlement in Optiscan’s current 1 for 15 rights issue (he didn’t)!
Remarkable stuff, truly amazing…
The truth is, if you go back as far as about October 2013 and consider the pattern of every Appendix 3Y filing, one can argue that Mr. Holt has done nothing short of creating the facade of “buying in” to the momentum of a company in order to project the positive optics of a dedicated executive chairman truly committed to success. This is a pathology, incidentally, that is all too common among “zombie” companies. Nothing like a bit of “skin in the game” to keep shareholders excited about the prospects of a company that has done, to a first approximation nothing, since about the middle of the last decade.
Am I wrong?
In between those little charades, Mr. Holt repeatedly violated his duty as a director and repeatedly broke the law. Between share trading and compensation (including expenses), Mr. Holt probably benefited to the tune of approximately a million bucks (excluding any “personal taxation optimisation”). Not bad for maintaining a (totally crap) website, signing a few documents now and then, and turning up to an AGM once a year. I have written this piece so that shareholders of any future venture that “Gus” may be involved in, understand that he is either stupid or lacks integrity. I actually sort of doubt the former and, unfortunately, the latter tends to reflect a personality defect that doesn’t usually change, even with a little jail time or a hefty fine.
Shareholders, when you read his touching departure letter, don’t shed a tear.
He did sweet bugger all for you…