Smoothwater Capital will participate in a special shareholders meeting for Equity Financial Trust in March with the intention of removing seven of its nine directors and appointing three new ones – including recently ousted Nick Kyprianou.
“Smoothwater has announced that it is acting jointly with Nick Kyprianou and Darryl Ivan (together with Smoothwater, the "Joint Actors") and intends that Mr. Kyprianou be appointed CEO of Equity's subsidiary, Equity Financial Trust Company and that Mr. Ivan be appointed Chief Risk Officer of Equity Trust,” Equity Financial said in a statement. “Kyprianou's and Ivan's employment in these positions was terminated in October 2013 upon a unanimous decision of the board of directors.”
Smoothwater Capital has a 12 per cent stake in Equity Financial. The requisition was first presented to Equity Financial in mid-November and the company was given to January 14 to set an official date.
“We’ve had shareholders approach us,” Stephen Griggs, Smoothwater’s chief executive, told the Financial Post in November. “There are only a handful of people, from what I’ve been told, who can do what (Kyprianou) does.”
Kyprianous’ ousting came as a surprise to some as the company had reported strong numbers for the year leading up to the departure.
“Equity Financial Trust, which sold transfer agent business earlier this year to focus on mortgage and deposit business, reported $72,662,000 in mortgage originations for the second quarter of 2013, an increase of 79 per cent from the year-ago period,” MortgageBrokerNews.ca reported in late August.
Following the dismissal, the company’s stock plummeting 17 per cent to $10.40. It has since rebounded to $12.08.
The board of directors at Equity Financial has assembled a “Special Committee” in response to Smoothwater’s requisition, comprising independent directors at Equity Financial Bradley Kipp, Thomas Spencer and Donald Wright. The job of the committee is to determine “the strategic direction proposed by the Joint Actors and alternatives thereto, all with a view to enhancing shareholder value.”