Medical device giant Masimo has hit back at claims made by the New York-based Politan Capital, protesting that the investment company is running “a campaign of deception and distraction”.

The response comes as Politan calls for Masimo to adopt two of its nominees onto the company’s board of directors effectively ousting the current CEO.

The split between the medtech company and investment group, the latter of which owns approximately 9% of the company, kicked off when Politan Capital wrote a letter to investors on June 26 calling for the company to adopt two independent nominees onto its board of directors claiming Masimo is operated under “broken governance” and with “egregious CEO benefits”.

Now, Masimo has responded to claims made by the shareholder firm by urging investors to back Masimo’s own two nominees—current CEO Joe Kiani and Christopher Chavez—to the board of directors.

In its letter to investors, Politan Capital elects its two nominees: former CTO of Agilent, Darlene Solomon; as well as former CFO of Stryker, William Jellison. Solomon has a background in research and development while Jellison has expertise in medical devices.

In a letter to investors, Quentin Koffey, managing partner at Politan Capital, said: “It has become clear that to protect shareholder value, let alone realise Masimo’s potential, the company needs a majority of truly independent directors.

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“We have made numerous efforts to avoid another proxy contest. Each of our settlement proposals has offered Mr. Kiani the opportunity to remain on the board. Our offers still stand.”

Koffey said that Masimo proposed to seat both Solomon and Jellison on the board, but only under terms Politan was not willing to agree to, including the loss of all licences of Masimo’s intellectual property (IP).

Additionally, the letter claims that Masimo’s share price has underperformed its own selected peers by over 90% in the past five years and that a lack of oversight from the board of directors has resulted in the company’s dip in stock value since 2021 when the company’s value peaked at approximately $303 per share. The company’s stock price was $113.2 per share at the time of writing this article.

Responding to claims in Politan’s letter to investors a spokesperson for Masimo said in a June 3 statement that the investment firm is “misleading investors”, questioning the independence of Politan’s nominees while arguing that the separation agreement had been in place long before the company went public.

The statement reads: “The separation of Masimo and Cercacor was completed in 1998, nearly a decade before Masimo went public, and was fully disclosed in the S-1 and subsequent materials.”

The statement adds that Kiani initially opposed the separation, but agreed in 1998 under the terms of the separation agreement: “In a desperate attempt to divert shareholders’ attention from the absence of a clear plan, we believe that Politan continues to misdirect to cover up their own failures.”

Both sides have gone as far as to establish separate websites presenting and refuting one another’s claims, with Politan Capital establishing, versus Masimo’s

The news comes after Masimo was able to win a patent infringement suit against US tech giant Apple over its pulse oximeter technology. At the same time, the company has secured a partnership with clinical trial company Medable to see its wearable devices used as part of the company’s trials across the US.