Former CEO’s explosive claims rock dental business
THE former CEO of embattled Gold Coast dental group Smiles Inclusive has alleged the company cut out a dentist from a share of the multimillion-dollar proceeds from the sale of two clinics.
However, a spokesman for the company denied the claims stating all financial obligations were settled at the time of sale in December last year.
Mike Timoney, who has been at odds with management since stepping down from the top job in early 2019, claimed Dr Henry Chen was not paid around $745,000 owed to him from the sale of clinics in Gatton and Laidley to 1300SMILES last year for $1.863 million.
Smiles listed in April 2018, consolidating 52 dental practices in one company.
Under the terms of the IPO dentists sold their practices to the company and reinvested 40 per cent of the proceeds back into Smiles in return for a slice of the revenue.
Mr Timoney said it was this revenue-sharing agreement that should have resulted in a payout to Dr Chen.
"They sold two of his practices to 1300SMILES without remunerating him for his 40 per cent.
"I think it's incredible. As you know our revenue model was a 40-60 revenue split (between the dentist and the company) and they sold Dr Henry Chen's practices without any consultation with him at all.
"The first thing he knew was his practice manager ringing him up and saying, '1300SMILES has just given us a welcome speech'."
Dr Chen did not return calls.
Smiles Inclusive CEO Michelle Aquilina said: "We are focusing 100% of our time and energy on supporting our dentists and staff through COVID-19 and getting the business back on track. Mike Timoney no longer has anything to do with Totally Smiles and his claims are just an unnecessary distraction when we all have more important priorities to deal with."
Mr Timoney said the sale of the Laidley and Gatton clinics resulted in an unsecured loan to Dr Chen, which was the reason the company has not released its half-year results.
Ms Aquilina, who recently replaced Tony McCormack in the role, previously said on April 30 the company would release its results "within the next month".
Mr Timoney said his comments did not reflect bitterness at being dumped as CEO.
"I'm still the largest shareholder so I wear several hats really, I always have done.
"When I was pushed aside, my concern was as a shareholder … I just wanted the best people to carry on running the company."
Mr Timoney said it was for that reason that he campaigned to remove chairman David Usasz and then executive director Tracy Penn from the board and install his own picks, including paediatric dentist Dr John Camacho.
He said he had been vindicated by the recent actions of dentists, including Dr Camacho, who had resigned from the company.
"I've kept very quiet over the last year, I've just let them get on with it and there was nothing more for me to do. I don't know whether to feel happy or sad (that) they have finally given (former CEO) Tony (McCormack) the boot and put in Michelle (Aquilina).
"I guess I'm happy that I was right but sad that Usasz was not right really.
"In some ways I'd rather Usasz was right and Tony was the right guy because then the company would be far healthier."
Mr Timoney stepped down from the role at the helm of the Burleigh-based company in early 2019 following a poor-first half result.
He then pushed for an EGM unveiling an "alternative board", which included Dr Camacho, but failed to get the numbers to vote for his picks.
Smiles is suing Mr Timoney in the Supreme Court for what it alleges were serious misconduct and breaches of law from his time as CEO, including mismanagement of company funds.
Mr Timoney has lodged a defence and denies the claims.
Originally published as Former CEO's explosive claims rock Smiles group