A major DavidsTea shareholder says the founder’s takeover of the board of directors at the beverage company will cause it to continue to lose good employees and fall far behind its potential.
TDM Growth Partners, which holds 12 per cent of the company’s shares, sent a letter to three independent directors giving them five days to respond to questions about adverse developments since Herschel Segal replaced the board at the June annual general meeting.
TDM says the shakeup led to the immediate termination of the CEO, resignations from three senior executives and two independent directors, and potential delisting from the NASDAQ as it has too few independent directors on its audit committee — among other things.
The group asks multiple questions about the search for a new chief executive, including why it was delayed.
It also asks why the company issued a statement rejecting a lawsuit filed by another shareholder, Porchlight Equity, against Segal and his private company Rainy Day Investments, when DavidsTea is not a named defendant.
The group says it believes DavidsTea is an outstanding brand, but will flounder under Segal’s leadership.
Shares of DavidsTea rose five cent US to close at $2.85 US on Nasdaq on Friday.