Less than two months after pocketing $2.1 million from the sale of shares in his company, Gilman Wong has been forced to step aside as chief executive of cancer treatment outfit Sirtex Medical after shareholder demands for an investigation into the transaction.
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The share sale, in late October, came a day after he told investors the company expected "double digit" dose sales in fiscal 2017, a forecast the company has since abandoned following pressure from the ASX.
In fact the company now concedes it has "no transparency on dose sales beyond a very short window".
The downgrade in the company's forecast resulted in a dramatic slump in Sirtex shares earlier this month, prompting investor outrage over the downgrade, which came soon after the company affirmed a strong growth outlook, along with criticism of the share sale.
The Australian Securities Exchange questioned Sirtex about the forecast of "double digit dose sales" the day after its October 25 annual general meeting with shareholders, before going back to the company a second time after it received a tip-off that cast doubt on the sales forecast.
It then took Sirtex another week to concede that dose sales would be 4 per cent to 6 per cent in the December half, falling well short of the double digit forecast given a few weeks earlier to investors.
"Mr Wong denies any wrongdoing concerning his share trading but, in the interests of due process ... he has volunteered to take temporary leave ... until the investigation has been completed," Sirtex said in a statement Friday night.
The board decision to commission an investigation into the dealings of the chief executive has been "made solely for the purpose of ensuring that the concerns raised with the company are appropriately investigated, and in no way implies any wrongdoing on the part of Mr Wong", the statement said.
Sirtex said legal advisers Watson Mangioni were to co-ordinate an investigation into the share sales by Mr Wong.
On October 26, Mr Wong sold 74,968 shares in Sirtex. That day, shares in his company traded between $28.07 and $29.30, closing at $28.61. If the entire parcel of shares were sold at the day's low of $28.07 he would have raised $2.1 million from the sale. A week after notifying the sharemarket of the sale, Mr Wong issued a statement saying the shares were offloaded to cover a tax liability after the vesting of rights in the company's shares.
"If this company was listed in the US it would be knee-deep in litigation by now," one US-based investor in Sirtex told a local analyst after the recent forecast downgrade.
