Bubs founder fails attempt to spill board

The attempt to spill the board of Bubs Australia by a dissident shareholder group led by founder Kristy Carr has been unsuccessful, putting an end to a months-long bitter dispute about the leadership of the infant formula company.

At an extraordinary general meeting on Thursday, more than 62 per cent of investors who voted (about 50 per cent of all investors) chose not to remove chairperson Katrina Rathie, Alibaba-backed C2 Capital managing partner Steve Lin, Reg Weine and Paul Jensen from the board of directors.

Shareholders at the meeting, held in a packed-out room in Sydney’s Radisson Blu hotel, include ex-CEO Carr, former chairman Dennis Lin, Chemist Warehouse chair Jack Gance, agribusiness industry heavyweight Kidder Williams, and dozens of retail investors.

“I appreciate that the past few months have been difficult for our shareholders, stakeholders, customers, suppliers and our loyal employees at Bubs,” Rathie told the room.

“After the shareholder vote today, I believe that all parties must unanimously accept the outcome of each resolution, even if it is not their preferred outcome, and move on in the best interests of the company. Irrespective of the voting outcome, there are still significant issues, challenges and opportunities facing the company which will require steadfast focus from our team as the business resets.”

The extraordinary general meeting is the culmination of an acrimonious dispute between current and former management that began in May when Lin and Carr were terminated from the company in a very public manner. Carr and Lin have filed an unfair dismissal suit against the company, which responded by filing a countersuit claiming the pair misused company funds on luxury travel and fashion.

Central to the dispute has been the company’s strategy for tackling the infant formula market in China, with the current board accusing Carr and Lin of inking exclusive agreements with daigou distributor AZ Global, which underperformed during the pandemic. Bubs has launched legal action against AZ Global’s Alice Trading and Willis Trading, which owe the company $5.7 million.

Although the current board directors have hung onto their positions, they do not have the support of more than a third of Bubs investors, who voted to spill the board and install the proposed “Save Our Bubs” team, comprising former A2 Milk executive Peter Nathan as CEO-aspirant, James Jackson as chair, and dairy industry veteran Rupert Soar as board director.