Investor and financial markets veteran Anton Tagliaferro has formally raised concerns regarding the governance of Humm by submitting an application to the Takeovers Panel. His application, lodged on December 15, 2023, questions the actions of chairman Andrew Abercrombie who purchased shares while a bid from Credit Corp was active. Tagliaferro argues that these transactions undermine the fair treatment of investors, potentially breaching the Corporations Act.
The application was submitted amid rising scrutiny of Humm’s board, particularly regarding the handling of the $385 million bid from Credit Corp. Tagliaferro’s concerns stem from Abercrombie’s acquisition of an additional 15 million shares starting on December 17, increasing his ownership to over 29 percent. The application alleges that Abercrombie held an “informational and positional advantage” concerning Humm’s business status, particularly regarding the Credit Corp offer and company earnings.
Details within the application reveal that Abercrombie received a comprehensive information pack about Humm’s operational performance just days before his stock purchases. This pack, approximately 100 pages in length, included critical insights into business forecasts and performance metrics, raising questions about the fairness of his trading activities during a sensitive period.
Tagliaferro, who owns over 4.9 million shares through various entities including Akat Investments, has expressed discontent with the board’s actions. He emphasized that in his extensive career spanning 45 years, he has rarely witnessed a situation where a director holding around 30 percent of a company could exert such significant influence.
Tagliaferro commented, “The board of directors has a duty of care to all shareholders. That doesn’t appear to have really happened that well in the last few years.” He further articulated concerns about the board’s credibility given Humm’s disappointing performance, stating, “How can shareholders really trust the current board?”
The application specifically requests that Abercrombie be prevented from voting the newly acquired shares at an extraordinary meeting scheduled for next month. Additionally, it calls for enhanced disclosures regarding the Credit Corp offer and the establishment of an independent board committee to evaluate the bid.
Humm has faced mounting pressure from activist investors, with groups like Raper Capital and Collins Street Asset Management seeking to remove three directors, including Abercrombie, during the upcoming extraordinary meeting. The board has previously defended its compliance with legal requirements regarding Abercrombie’s trading, asserting that independent director Robert Hines was satisfied with the processes followed.
Tagliaferro’s application highlights a notable disparity in how Humm’s board engaged with Abercrombie’s previous $286 million bid compared to the current offer from Credit Corp. He asserts that the board had granted Abercrombie due diligence access prior to his bid being withdrawn, while the current suitor has not been afforded the same opportunity.
As of the latest trading session, Humm’s shares closed at 75.5 cents, reflecting a year-to-date increase of 7.9 percent. However, this is a stark contrast to the 43 percent decline from a five-year peak reached in 2021. The situation at Humm continues to unfold, with significant implications for its governance and investor relations.
