9/20/2016Redflex Executives To Meet With Shareholders
Redflex announces upcoming shareholder meeting despite considerable uncertainty about its future existence.
Redflex Traffic Systems may soon emerge from the shadows. Apart from legally required financial disclosures, the Australian firm has not issued a single press release since January. The photo enforcement giant went silent in the wake of the ongoing bribery scandal that has seen one of its own board members, an executive vice president, consultants and other employees convicted of corruption and sentenced to time in a federal prison. Company chairman Adam L. Gray on Monday announced an opportunity for Australian shareholders to come and discuss a return to profitability for the firm.
"For the past year your board and management have continued to take the necessary steps to move your company forward and to improve its financial performance," Gray wrote. "While the 2016 financial year was challenging, the significant change initiatives implemented in the previous financial year has resulted in demonstrable improvement in the company's financial performance across virtually all metrics."
As reported last month, Redflex turned a $31.9 million loss in 2015 into a $4.7 million loss in fiscal 2016 by focusing its efforts on installing automated ticketing machines outside the United States. The viability of the new strategy will be a prime topic at the company's annual meeting, held in the Melbourne, Australia offices of the law firm Baker and McKenzie on November 16. The agenda includes the re-election of two board members and the highly controversial bonus packages for CEO Paul Clark and the rest of the top management.
"As you are aware from the results of the 2015 annual general meeting, the adoption of the 2015 remuneration report was opposed by more than 25 percent of the votes cast," Gray wrote. "As a result the company has listened and will continue to listen to shareholders' concerns as the company seeks to maintain the right balance between shareholder interests, employing the best people and remaining competitive in the Australian and international labor markets."
A number of key shareholders saw the proposed compensation packages as overly lavish considering the company's current legal troubles. Redflex warned that it may not survive after the courts hand down their judgments.
"At this point in time it is not possible to reliably estimate the timing for completion of the US Department of Justice investigations nor the Chicago legal actions and any quantum or recoveries in relation to these matters, while potentially significant, is not capable of being measured," Redflex explained in its annual report. "If the matters noted above resulted in negative judgements and damages, or loss of revenue, in amounts (individually or in aggregate) that could not be funded by the company based on the level of financial resources available to it at such time, there is significant uncertainty as to whether the group could continue as a going concern."