Morgans denies voting breach in failed dental-chain spat

afr.com:

Stockbroking outfit Morgans was accused of voting shares of clients without authorisation in a boardroom brawl for a dental chain that it had helped raise $35 million in a disastrous float.

The accusation was rejected on Wednesday ina Federal Court public examination into the events of now collapsed chain Smiles Inclusive.

Philip Lee, who was Morgans executive director in its corporate advisory arm, appears at the hearing on Wednesday. Elke Meitzel

The hearing also heard of messages from clients of Morgans saying they had never voted shares despite being recorded as having done so.

The examination also detailed Morgans taking the extraordinary step of lending $200,000 interest-free to the then struggling Gold Coast-based chain, which had floated in 2018 with almost 50 practices under the Totally Smiles brand.

The unsecured loan in mid-2019 came with Morgans, a major stockbroking outfit, also earning fees from raising funds for the dental chain.

“It is unusual,” Morgans’ then corporate advisory director, Philip Lee, said on Wednesday about the loan.

But Morgans had a “large number of clients” invested in Smiles and the broking outfit “wanted to take whatever steps we could to keep the company alive to enable it to raise capital it needed to continue”, he said.

Brisbane-based Morgans describes itself as Australia’s largest national full-service stockbroking and wealth management network, boasting more than 250,000 clients. Its corporate arm has helped raise funds for companies more than 500 times but Morgans’ promotion of some investments, such as failed fund manager Blue Sky Alternative Investments, has attracted controversy.

Smiles raised $35 million in an ASX float in April 2018, underwritten by Morgans. The dentistry