Surfstitch refuses to answer shareholder questions

AAP & Internet Retailing

9th Jun 2017

Surfstitch confirmed today it has received an open letter from Crown Financial, the major shareholder that earlier this week called for an extraordinary general meeting to vote on the removal of chairman Sam Weiss.

The open letter contains a number of questions relating to Surfstitch’s recent trading halt and the class action being brought against the company, among other topics.

“SRF is in a precarious position and disclosure to the market to date has been superficial at best,” Crown said in the letter, which was released to the ASX by Surfstitch.

Surfstitch said it has been fully compliant with all statutory and regulatory obligations, but refused to answer the questions, claiming it would require disclosure of detailed financial, strategic and management information.

“Many of these questions are speculative or would require the company to comment on ongoing or incomplete negotiations,” Surfstitch said in a statement.

Crown Financial is a member of the Crown Financial group of companies which has taken legal action against Surfstitch in relation to content sharing deals.

The Australian Securities and Investments Commission is investigating Surfstitch’s disclosures in connection with the content sharing deals.

Crown made a failed takeover bid for the retailer last year.

Surfstitch went into a trading halt in late May after shareholders launched a potential $100 million class action.

The action launched by law firm Quinn Emanuel in Queensland’s Supreme Court accuses Surfstitch of making misleading statements and forecasts of its 2015/16 earnings.

The company last traded at 6.8 cents a share, significantly lower than its peak of $1.90 a share in December, 2015, and is expected to resume trade when it reports its full-year results in August.

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