M Winkworth has issued High Court proceedings against its Non-Executive Chair and former long-serving Managing Director, Simon Agace.
The AIM-listed estate agency franchisor alleges breaches of confidentiality, provisions of a relationship agreement signed in November 2009 and duties owed by Agace as a director under the Companies Act 2006.
Winkworth has also applied for interim injunctive relief concerning proposed changes to the composition of its board and the alleged use and disclosure of confidential company information.
The company stresses that none of the allegations has been determined by the court and that no decision has yet been made on its application for interim relief.
BOARDROOM TENSIONS SURFACE
The action follows signs of governance tensions at Winkworth’s annual general meeting in May.
All resolutions passed, but approximately 5.3 million votes were withheld from resolutions covering the re-election of Chief Executive Officer Dominic Agace (main picture, inset) and four other directors. Simon Agace’s re-election attracted only 9,714 withheld votes.
Following the meeting, Winkworth acknowledged that a significant number of votes had been withheld and committed to engaging with shareholders. The official AGM results show only around 18% of the issued share capital participated in several board re-election votes, compared with approximately 59% for Simon Agace’s resolution.
City AM reports that the dispute concerns attempts to change the board, including the position of Dominic Agace (main picture, inset), Simon Agace’s son. Those details are not set out in Winkworth’s regulatory announcement.
AGREEMENT DATES FROM AIM FLOAT
The relationship agreement was signed when Winkworth joined AIM in 2009 and Simon Agace was its controlling shareholder.
Winkworth’s admission document says the agreement was intended to ensure the group could operate independently and make decisions in its own best interests.
It also required transactions and relationships involving Simon Agace or connected persons to be conducted at arm’s length and on normal commercial terms.
The decision to begin proceedings was approved by the directors entitled to participate after receiving independent legal advice.
Winkworth says its estate agency franchise business continues to operate normally and its executive team remains focused on delivering the group’s strategy.
