It looks like a fight is brewing with alternative lender Equity Financial Trust (EFT).
Ousted former CEO Nick Kyprianou and former CRO Darryl Ivan have teamed up with investor activist group Smoothwater Capital Corporation and legal counsel. In a press release, Smoothwater says it intends to explore “various means to effect changes in the management of Equity and Equity Trust by reinstating Mr. Kyprianou and Mr. Ivan to their former roles.”
Readers may recall that Kyprianou, who helped build Home Trust, was replaced last month with Michael Jones, formerly of Xceed Mortgage. See: (EFT Parts With its President & Chief Risk Officer)
Equity Financial Holdings chairman Donald Wright shot back at Smootwater, stating, “The Board unanimously determined that a change in management on October 3rd was desirable and we stand by that decision.” Here’s the rest of the company’s release.
This fracas may not be disruptive to EFT’s day to day operations, but it could potentially cause negative perceptions among brokers. We’ll see if that has a measurable impact on its volumes.
EFT originated $104 million in mortgages last quarter (a relatively small number for a broker-channel lender) and lost $175,000. Its stock got whacked after Kyprianou left, but it’s been rallying hard toward all-time highs. (Chart)
Rob McLister, CMT
Last modified: April 26, 2017
BRING CEO Nick Kyprianou BACK!
Ooh, it’s so rare to see drama in our line of work, I’m kind of invigorated to hear about this going on. Yes I agree, Kyprianou needs to come back and he was ousted without any real reason given as to why.
Allegedly fired twice for the same reasons. Now burdening shareholders with an expensive proxy battle so he can get his job back. And the Risk Officer who allegedly put the company in jeopardy by being offside with regulators. Yes have him come back so the shares can go to 2$. Yes bring back a dismissed CEO who was fired unanimously by the board.
Shareholder, you are wrong to even infer fired twice. Dismissed by this Board is true. The nature of the institutional Equity lending business is to fight with the regulator, hard to fire someone about that one. The truth is that none of us; except those in question and the Board, really know what happened. Many of us do know Nick and he has always carefully protected his company and grown his business. Very few people in Canada are experts in institutional Equity lending but Nick Kyprianou is absolutely one of them.
Ron, dismissed/fired, same thing twice in 2 years. Read the press releases, he was fired. People do know what has happened and as a shareholder I do not like an expensive proxy battle at my expense. The battle is revenge so he and the CRO can get their jobs back and fire the board. Not to increase the stock price or increase shareholder value.