{"id":35195,"date":"2013-04-09T15:58:36","date_gmt":"2013-04-09T13:58:36","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=35195"},"modified":"2013-04-10T09:31:53","modified_gmt":"2013-04-10T07:31:53","slug":"foneworx-board-hits-back-at-kirsh-family","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/it-services\/35195\/foneworx-board-hits-back-at-kirsh-family\/","title":{"rendered":"FoneWorx board hits back at Kirsh Family"},"content":{"rendered":"

The board at FoneWorx<\/a> says it has noted with \u201cconsiderable surprise\u201d the press release issued by the Kirsh family alleging poor state of corporate governance at the listed telecoms and IT solutions provider.<\/p>\n

The family said on Monday (8 April) it would request an extraordinary general meeting (EGM) to remove and replace the non-executive members of the board.<\/p>\n

The family says it will look to retain the executive directors at FoneWorx\u00a0to implement a proposed merger between the two entities.<\/p>\n

In December 2012, Value+ Nettwork (V+) \u2013 a group founded by\u00a0William Kirsh<\/a>\u00a0\u2013 and FoneWorx announced an intention to merge.<\/p>\n

Issie and William Kirsh, through their respective family trusts, invested in FoneWorx with the view of merging V+ and FoneWorx for the benefit of shareholders.<\/p>\n

The Kirsh family own approximately 75% of V+ and 32.7% of FoneWorx, being the respective companies\u2019 largest shareholders.<\/p>\n

The FoneWorx board said that the attack by the Kirsh family \u201cis nothing more than an attempt by the Kirsh family to so reconstitute the board of FoneWorx as to enable them to force through a transaction which would give them access to the significant capital required to pursue a course which the board of FoneWorx perceives as fundamentally flawed\u201d.<\/p>\n

Perspective<\/b><\/p>\n

FoneWorx stressed that it needed to put the Kirsh family\u2019s statements into perspective.<\/p>\n

The group said its board were concerned by the constant changes to Kirsh family owned and controlled business, Opengate\u00b4s financial projections and funding requirements and its failure to achieve its current year projected results.<\/p>\n

FoneWorx said that following several rounds of negotiations, a further meeting took place which culminated in an agreement that the entire transaction be cancelled by consensual agreement.<\/p>\n

\u201cAn appropriate cancellation agreement was prepared by the attorneys for the Kirsh family and approved by the company attorneys and the company,\u201d FoneWorx said.<\/p>\n

The group pointed out that its first indication that the Kirsh family had again reneged on that agreement was the press release to which it was responding.<\/p>\n

No poor state of corporate governance<\/b><\/p>\n

The FoneWorx board said it categorically denies that there is a “poor state of corporate governance” at the company and reminded Kirsh that he has said on many public platforms that the company is well-run.<\/p>\n

\u201cIt is also most surprising that at no stage during our engagement, and the due diligence on FoneWorx by Value+ did the Kirsh family or their advisors raise any issues regarding the corporate governance of the company or its lack of strategy.”<\/p>\n

\u201cThe latest observations can therefore only be seen as opportunistic and in bad taste,\u201d FoneWorx said.<\/p>\n

The board also defended its \u201csound\u201d financial strategy which it said has resulted in solid compound growths on many key dials and the aggregation of close to R100 million in cash.<\/p>\n

The company added that it has also paid good dividends over the past four years. In addition, each operating division has defined strategies which have shown positive growth.<\/p>\n

\u201cWe remind the Kirsh family that FoneWorx has achieved a five year compound net profit of 20%, and net asset value growth over the same period is 45%. The company has a strategy for each of its operating divisions which shareholders may be informed of at our annual general meeting,\u201d FoneWorx said.<\/p>\n

The company also highlighted its transparency.<\/p>\n

Bullying tactics<\/strong><\/p>\n

FoneWorx said further that the tactic and strategy adopted by William Kirsh has been to apply a bullying approach aimed at control and creating a board that effectively “rubber stamps” his wishes.<\/p>\n

The group said it believes that \u00a0this ultimately doesn’t bode well for building a board or management team which is democratic and cohesive.<\/p>\n

\u201cHis tactics, emotional outbursts and divisive approach have only resulted in alienating the FoneWorx management team. A strategy to force two parties together under these circumstances can only result in destroying value,\u201d the group said.<\/p>\n

\u201cIn conclusion we believe that the Kirsh family\u00b4s hostile approach is inappropriate and a mischievous attempt to discredit a well-managed company in order to try and implement an agreement to acquire businesses which they control and the company\u00b4s cash reserves in a manner for a purpose which the board strongly oppose.<\/p>\n

\u201cShareholders are advised that there is now a dispute between the Kirsh family and the company as to the status of the sale agreement and\/or its implementation,\u201d FoneWorx said.<\/p><\/blockquote>\n

More on FoneWorx and the\u00a0Kirsh Family<\/strong><\/p>\n

FoneWorx court battle looms<\/strong><\/a><\/p>\n

FoneWorks sees revenue slip<\/strong><\/a><\/p>\n

FoneWorx in Value+ acquisition<\/strong><\/a><\/p>\n

FoneWorx completes Kirsh Family deal<\/strong><\/a><\/p>\n

FoneWorx investors approve Kirsh Family deal<\/a><\/strong><\/p>\n

FoneWorx to change direction<\/a><\/strong><\/p>\n

Two directors leave FoneWorx<\/a><\/strong><\/p>\n

FoneWorx reports 14% rise in H1 revenue<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The board at FoneWorx has hit back at the Kirsh family who have alleged poor state of corporate governance at listed telecoms and IT solutions provider.<\/p>\n","protected":false},"author":10,"featured_media":35200,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[1807,26,3752,5555,4801],"class_list":["post-35195","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-it-services","tag-foneworx","tag-headline","tag-kirsh-family","tag-opengate","tag-value-nettwork"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/35195","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=35195"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/35195\/revisions"}],"predecessor-version":[{"id":35265,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/35195\/revisions\/35265"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/35200"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=35195"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=35195"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=35195"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}