Eric Wilson, the founder of the company formerly known as Xinja Bank, has resigned from the board.
Xinja, which now trades under the name A.C.N. 618 937 054 notified ASIC last week that Wilson was no longer a director of the company.
Wilson relinquished the executive reins of the business in early May but continued as a director until last Thursday according to documents filed to the regulator.
The company has abandoned its original commercial purpose to operate as a retail financial services provider and has refashioned its business case to delivering technology services to fintechs.
Banking Day understands that the company is also trying to negotiate a deal to sell its core banking platform to improve its cash position.
While Wilson no longer has a hand in overseeing the operations of the business, he potentially has a significant interest in the performance of the company’s new strategic model and the proceeds from any asset sales.
According to page 39 of the 2020 annual report almost half of the ordinary shares issued by the company were held by Wilson and other founders of the business.
Until May last year Wilson and the other founders owned 24.3 million “founders shares” that were paid up to a value of A$50,173.
The annual report states that the founders’ shares were converted to ordinary shares in May 2020.
If that is correct, then the founders’ shares now rank equally with the ordinary shares for which Xinja investors paid more than $89 million.
“The 24,384, 078 founders shares on issue at 30 June 2019 converted in May 2020 and therefore there is only a single class of shares at 30 June 2020, being ordinary shares,” the Xinja directors told shareholders in the 2020 report.
The conversion event is significant for investors who bought into the company in the last three years because it is likely to dilute the size of any proceeds they might receive in the event of a winding up of the company.
However, there is some evidence to indicate the share conversion might not have occurred or was not reported to ASIC.
That’s because the ASIC database continues to distinguish between the “founders shares” and the “ordinary shares” of investors.
If the ASIC records are shown to be an accurate reflection of the company’s share register then investors who paid as much as $4.08 for each Xinja share last year stand to harvest a greater share of proceeds from any winding up of the business.
Conversely, they might also be in line to garner higher dividends if the company is able to improve its operating performance.