In the closing minutes of trading, the RAIZ Invest Ltd (ASX: RZI) share price raced up 5% to end the week at $1.82.
The RZI share price reacted to an announcement regarding the ongoing battle between the Raiz board and its CEO George Lucas.
What’s been going on with the Raiz share price?
The Raiz share price originally fell 12% in September after entities controlled by Mr Lucas issued a section 249D notice.
A section 249D notice is where shareholders representing at least 5% of the company call for a general meeting to vote on a resolution.
Since Mr Lucas owns more than 5% of Raiz, he can issue the notice on his own.
The resolution, in this case, was the removal of three board members, Chairman Kevin Moore and non-executive independent directors Nina Finlayson and Kelly Humphreys.
It remains unclear the exact underlying issue between the board members and Mr Lucas. However, a subsequent announcement cited regulatory and governance concerns.
“As your company 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. The interpretation of these frameworks has led to conflict in the boardroom” – Raiz Board
Why did the Raiz share price bounce 5% today?
An update was provided today just 17 minutes before the market closed on the conflict between the board and management. Here’s what was covered:
- Mr Moore and Ms Finlayson would step down as directors over the coming four and six weeks, respectively
- Brendan Malone, CEO of the ANZ division, will become joint Group CEO with Mr Lucas, while also joining the board as an executive director
- The only director not named in the section 249D, David Gordon, will become interim chairman with immediate effect
- Subsequent to the above leadership changes being agreed and announced to the market, the section 249D notice will be withdrawn
Questions left unanswered
A lot of mystery still surrounds the nature of the conflict between the board and management.
What were the governance and regulatory issues? Why did Ms Humphreys remain a board member while the two other directors departed? Who will be the fifth board member?
Currently, the Raiz board consists of its two CEOs and two independent directors who seem to have differing views.
In my opinion, both the board and management owe it to Raiz shareholders to provide more transparency on the events that have transpired.
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