Why Bubs’ directors, backed by Alibaba, dumped its founder

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In other words, he was demoted from executive chairman to non-executive director, a move which the non-executives noted was a response to the deterioration in the company’s performance for the most recent half year and their view that a change in leadership was due.

(Bubs performance in the China segment was down 48 per cent and group costs were elevated – which contributed to an underlying loss of circa $23 million.)

The demotion of Lin was a decision clearly not backed by Carr as chief executive. She took to social media with a level of praise for Lin worthy of a corporate saint.

“Dennis Lin, Bubs true leader, has masterminded and led every acquisition, merger, strategic partnership, capital raising and corporate development, as well as Bubs route-to-market and growth strategies in China and the USA,” she effused.

“He is the smartest, most strategic person I’ve ever met and it’s been the highlight of my career to work alongside him.”

She then promptly took a month of personal leave – just in case the board hadn’t taken the hint that she was not happy with its treatment of Lin.

Nappy-full mess

It was during this period that, according to Bubs insiders, Lin and Carr went rogue – contacting various stakeholders including customers and shareholders asking for meetings, all without board authorisation.

It begs the question of what Carr and Lin were trying to achieve in their departure from the use of the authorised channels. Were they trying to stage their own coup against the board?

It certainly sounds possible, but the Bubs board isn’t saying and Carr didn’t respond to a request for comment.

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But the board has the support of major shareholder C2, which is clearly concerned about the company’s recent performance that has led to a strategic review being undertaken.

The reason given for Lin’s demotion last month was to improve governance hygiene – separating the role of chairman from the executive.

That’s fair enough, but the ensuing public governance brawl is a nappy-full mess.

“We acknowledge Kristy’s long service to Bubs and the role she has played in building the Bubs brand to the position it enjoys today,” the newly installed chair said in a statement this week.

But Carr didn’t have the numbers. Together with Lim, the pair accounted for only a stake of only 2.6 per cent – nowhere near enough to outvote the major shareholder.

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