Raiz Invest founder and Group CEO, George Lucas appears to be locked in a power struggle with his own board and is seeking to remove three of the company’s four Non-Executive Directors, including chair Kevin Moore.
The listed fintech’s board issued a statement late last week saying it had received notice from Lucas through his company BBH-GL Nominees, which has around a 5% stake in Raiz (ASX: RZI), seeking an extraordinary general meeting for shareholders to vote on the removal of three independent NEDs. They are Moore, Kelly Humphreys and Nina Finlayson.
Moore joined the board in December 2020 as chair, with Finlayson and Humphreys appointed in April last year.
The Raiz micro-investing app had more than $900 million in funds under management (FUM) to end FY21, with active customers up 86.7% year-on-year to 456,927. Australian FUM ended the financial year at $799.6 million (up 76.3% YoY), with Superannuation FUM up 53% YoY to $106.6 million
Raiz shares went on a wild ride last week falling from $1.98 to $1.74 before rebounding to $1.90 on Friday. After the market close, Raiz announced that company secretary Elizabeth McGregor had resigned after 18 months, replaced by corporate lawyer Andrew Palfreyman.
In a statement to the ASX last week, the company said the board’s directors are “fully aligned with the strategy being delivered by the MD/Group CEO and his very competent management team in Australia, Indonesia and Malaysia”.
The statement said that as the business “continues to transition and grow from a successful founder led private start up into a successful and fast growing ASX listed company there is a requirement for the Board to work together within the regulatory and governance frameworks our markets and shareholders demand”, there had been boardroom conflict over “interpretation of these frameworks”.
“Raiz Invest has implemented and embedded strong, rigorous regulatory and governance frameworks that reflect the latest community expectations and regulatory standards,” the Board statement said.
“Your Board of Directors remain committed to working with your CEO and his management team to continue to build companywide competencies and capabilities to support future growth.”
Raiz launched in 2016 and has an Asia-Pacific growth focus, with offices in Malaysia and Indonesia as well as plans to expand into Thailand and Vietnam. The business listed in 2018 at $1.80 a share with a market capitalisation of $120 million.
Lucas is the third biggest shareholder in Raiz with 4.48 million shares, having sold a 3.2% stake of 2.3 million shares in mid July, “pursuant to orders of the Family Court of Australia” the CEO said in a statement to the ASX.