Smile Merger Now In Doubt

March 7, 2011       Mark Hrywna      

Three weeks after announcing a merger of the organizations, two cleft surgery charities this morning voted to annul the fledgling relationship.

“Since we announced the proposed merger, Smile Train and Operation Smile have had to spend too much time and attention dealing with false innuendo, accusations and allegations,” Smile Train Chairman and Co-founder Charles Wang said in a statement released this morning. “This has taken time and focus away from what is most important, helping children with clefts. The resulting damage to both Smile Train’s and Operation Smile’s efforts led us to conclude that we could not, in good conscience, continue to pursue the merger,” he said.

Smile Train’s board voted unanimously to cancel the merger during a special meeting this morning. Wang remains as Smile Train’s chairman and the nine-member board of the New York City-based charity remains intact. Operation Smile’s board also voted to call off the merger.

“We have thoughtfully and carefully pursued combining our two organizations with the goal of treating more children in more countries around the world. Due to controversy surrounding the proposed merger, we have mutually agreed to remain independent organizations,” William R. Fox, chairman of the board of Norfolk, Va.-based Operation Smile, said in statement. “Our focus is to help more children and we do not want anything to distract from this effort.

“One of the many positive results of this in-depth process is that our two organizations have identified key opportunities where we can leverage our collective expertise and resources to collaborate in the future. Both Operation Smile and Smile Train maintain our commitment to utilizing our respective models to build local medical capacity and provide quality care for the hundreds of thousands of children around the world who suffer from cleft lips and cleft palates.”

In its statement, Smile Train also announced the formation of an executive management team consisting of Priscilla Ma as executive director; Satish Kalra, senior vice president and managing director of South Asia; Dr. Shell Xue, senior vice president and managing director of Asia; Robert Toth, chief operating officer; Jill Woodcome, senior vice president of programs, and Brian Dearth, senior vice president and chief marketing officer. A member of the Medical Advisory Board, which last week voted against the merger, will be named an ex-officio member of the board.

The proposed merger was approved Feb. 14 by both boards, with a unanimous vote by Operation Smile and a 5-3-1 vote by Smile Train’s board. Board members who voted against it have been raising concerns with anyone who would listen, including New York Attorney General Eric Schneiderman. Board members Mark Atkinson and Robert Smits sent a letter to the Schneiderman last week asking him to intervene. Both the New York and Virginia attorneys general offices had to approve the merger, since Smile Train is based in New York City, and Operation Smile in Norfolk, Va.

Wang and co-founder Brian Mullaney have had a tenuous relationship for the past year that culminated with Mullaney’s ouster as CEO this past fall. Wang spearheaded merger talks with Operation Smile in December which raised concerns by protestors that the merger was done deal by the time it was presented to boards last month.

An online petition to “Save Smile Train,” sponsored by supporter Emily Tabor, had garnered more than 2,000 signatures as of this morning, in addition to posting a letter of support from Smile Train’s Medical Advisory Board.