Power Struggle at AGT as Ainsworth Opposes Novomatic Over Reforms

(AsiaGameHub) –   Kjerulf Ainsworth, the second-largest shareholder of Ainsworth Game Technology (AGT) with an 8.74% stake, has announced his intention to vote against the constitutional changes regarding remuneration put forward by majority shareholder Novomatic AG at the upcoming Annual General Meeting.

Another Chapter in the Power Struggle in AGT Begins

In a communication to fellow shareholders, Ainsworth expressed his view that the revisions suggested by Novomatic AG are insufficient to resolve issues surrounding potential conflicts of interest and payments to executives that were not previously disclosed. Ainsworth cited an Australian Financial Review report claiming that AGT chairman Danny Gladstone and company secretary Mark Ludski were granted undisclosed bonuses of AUD 10 million and AUD 5 million ($7.1 million and $3.55 million), respectively, following Novomatic AG’s initial acquisition of a majority stake in 2018. According to Ainsworth, these specific payments fall outside the reach of the proposed amendments.

This situation marks the latest development in the ongoing ownership narrative at Ainsworth Game Technology. Novomatic currently holds a 66.6% interest in the firm. Kjerulf Ainsworth, son of founder Len Ainsworth, has increased his holding to 8.74% from 7.27% last year. This increase follows an initiative Ainsworth began last autumn, aiming to raise his ownership to 10%, a goal he has yet to reach.

What Else Did Ainsworth Say in His Letter?

Within the letter, Ainsworth noted his support for initiatives aimed at strengthening governance at Ainsworth Game Technology. However, he concluded that, given new information, the suggested constitutional updates fail to guarantee the necessary level of integrity and transparency.

He further contended that the proposed resolution and changes do not sufficiently address his grievances or explicitly prohibit AGT executives and officers from obtaining benefits that might clash with the interests of minority shareholders.

Regarding the alleged payments to Gladstone and Ludski, Ainsworth stated that such hidden benefits erode shareholder confidence and should be prohibited. He also asserted that the remuneration amendment resolution introduced by Novomatic AG would fail to rectify these matters, noting that the benefits were allegedly issued by third parties and, in the instance of Ludski, were not paid to a director.

Ainsworth also claimed the proposed amendments are flawed, warning that the changes brought about by the Remuneration Amendment Resolution could be falsely presented as a complete solution to AGT’s governance issues. He added that, in his opinion, the amendments fall short of the standards of integrity required by regulators.

It could be suggested that these internal power dynamics might have been avoided had Novomatic succeeded in acquiring the remaining AGT shares. However, a previous attempt to do so failed, representing another hurdle in Novomatic’s stated ambition to fully acquire the Australian gaming company.