Wingate outbid on Everest board

Wingate Group’s bid to vote out the current board of Everest Financial Group has failed, with a majority of shareholders at Everest’s annual general meeting (AGM) voting in favour of the existing board.

According to a Wingate letter sent out to shareholders in the wake of the vote, an Everest shareholder, Robert Blann, had committed to supporting the existing board before the AGM took place. Blann is a major shareholder in Everest, as is the founder and chief executive Jeremy Reid.

“Mr Blann now has backed the current board and management. We would hope that in doing so, he has clarity on the business plan and initiative that will be undertaken to stem the cash burn and to turn the company around, or to enter into an orderly wind down [of the fund],” Wingate managing director Farrel Meltzer told Money Management.

In the letter, Meltzer reiterated that drastic action was necessary to stop “the erosion of shareholder value”, and said it was important to distance Wingate from Everest’s existing practices and draw attention to its ongoing problems. Wingate is the majority shareholder in Everest.

However, Reid said that while he understood shareholder frustration over what had happened in the last 18 months, the global financial crisis had had the biggest impact on the company and was out of his control.

He was absolutely committed to “regaining momentum” in the business and achieving the best possible outcome for shareholders, Reid said.

Everest was bringing down costs, diversifying the business and targeting new avenues of distribution, Reid said.