Join our daily newsletter At The Bell to receive exclusive market insights
Melbana Energy (ASX:MAY) has raised eyebrows on Wednesday after answering a not-too-common ‘please explain’ from the ASX compliance department, with regulatory officers apparently querying the nature of chairman Andrew Purcell’s long-running status as executive director.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
Not exactly your typical speeding ticket. The first question the ASX asked in its letter disclosed on Wednesday: “Was the 2018 AGM the last time Mr Purcell was subject to re-election at an AGM?”
It’s not until you get further down the page of ASX Compliance’s questions that you start to get a sense of where the bourse operator is heading with this line of questioning: in between the lines, it sure seems like they’re concerned Andrew Purcell may be in breach of some section or other of the relevant Corporations Act 2001, which is so dry I’m not going to bother going into it.
But question four from the ASX reads: “What Corporations Act provisions support the validity of Mr Purcell’s appointment in his continuing tenure?” According to Melbana, after Purcell was re-elected in 2018, in February 2020, Melbana then appointed Purcell to Executive Chairman; he was already Managing Director.
Melbana on Wednesday highlighted Corps Act clauses that allow directors to appoint another director into an “executive director” role, which the ASX noted in its letter could be a ‘Managing Director,’ ‘Chief Executive Officer,’ ‘Executive Chair,’ or whatever – apparently, the vibe of the thing is what matters, not the title on the business card.
Which does leave one to wonder what, exactly, the ASX is getting at here. Surely it’s hardly a matter of public importance if an individual in the role of an executive director duplicates his status, and in Purcell’s defence, the 2020 decision should be viewed in the context of our modern plague: That was the very month it became apparent COVID-19 wasn’t just another flu, and was taking over the world.
In what I’ll present as a final food-for-thought-type-comment, Melbana also added in its reply to the ASX that because Purcell satisfies the definition of “principal executive officer,” he hasn’t needed to retire by rotation. But perhaps most telling was what the company answered last of all: Purcell’s making over half a million ($581,800) a year.
Shareholders in Melbana are currently staring down one-year returns negative -60% and nearly 4B shares on issue. HotCopper presents that observation without comment and without implication of criminality, but it does explain why not everybody in the forums was happy in the relevant announcement thread.
MAY last traded at 1.2cps.
Join the discussion: See what HotCopper users are saying about Melbana Energy Ltd and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
