|
|
  |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||
Coles investor calls for inquiry
By Geoff Hiscock
SYDNEY, Australia (CNN) -- The bitter boardroom battle at Australian retailing giant Coles Myer took a new twist Wednesday with a key shareholder calling for an independent inquiry into plans to break up the company. Premier Investments, the vehicle of dissident director Solomon Lew, said it wants an inquiry that lets all Coles Myer shareholders understand how a controversial break-up plan known as "Project Gold" was created. Coles Myer is one of the most widely held companies in Australia, with 560,000 shareholders. Premier is the single largest shareholder, with a 5.8 percent stake. Premier Investments director Gary Weiss told a media briefing in Melbourne that Project Gold would likely have seen the "hasty demerger" of the Myer Grace Bros. and Target stores from the Coles Myer group. "As such, this project involved the most significant commercial decision to confront the Coles Myer board since the formation of Coles Myer in 1985," Weiss said. He said Lew's opposition to Project Gold was the real reason behind a campaign to remove Lew from the board. Coles Myer chairman Rick Allert immediately rejected Premier's call for a review, saying it was "totally unncessary and a waste of shareholder funds". Restructure on hold
Coles Myer, which turned over A$25.7 billion ($14 billion) last financial year through its Coles and Bi-Lo supermarkets and its Kmart, Target and Myer Grace Bros stores, has been looking to spin off under-performing units. But on October 1 it said that any restructure of the group was on hold until at least July 2003. It cited the importance of the coming Christmas trading period. (Full story) Lew, a director of Coles Myer since 1985 and its chairman from 1992 to 1995, is fighting to retain his seat. He and his family hold 87.5 million shares, or a 7.4 percent stake in the retailer, through Premier Investments and First Retail Investments. Eight of the 10-member board oppose his re-election at the company's annual general meeting on November 20, claiming Lew has been there too long and that his various other retail interests and supplier transactions with Coles Myer are "not compatible" with "principles of good corporate governance". One of the eight opposing Lew is Coles Myer chief executive and board member John Fletcher, who was appointed last year to rescue the company's flagging retail position. Publicity campaignFletcher said Tuesday that he wanted a harmonious environment and might have to consider quitting if Lew stays on the board. Lew, who has been waging an extensive publicity campaign that includes full-page advertisements in major newspapers, responded that Fletcher's comments were "effectively an attempt to coerce shareholders to vote against directors of whom he disapproves". "Mr Fletcher does not have a retail background and he is seeking, by my removal, a board with no retail experience," Lew said. Lew's campaign stresses his 40 years of retail experience and the record profits made by Coles Myer when he was chairman. He has also revealed his opposition to the phase-out of Coles Myer's popular shareholder discount card, which Lew introduced in 1993. Lew said last week he spoke against the card's termination when the board agreed in March this year to end it. But Lew was also linked to the financially disastrous transaction known as the Yannon affair, which cost Coles Myer A$18 million in 1990 and sparked a massive investigation by the Australian Securities and Investments Commission. Shares in Coles Myer closed 5 cents or 0.78 percent lower on Wednesday at A$6.34. They tumbled to a five-year low of A$5.70 last month amid perceived poor performance by some of its units and the battle between Lew and then-chairman Stan Wallis. Wallis subsequently stepped down and was replaced by prominent Adelaide businessman Rick Allert, who also opposes Lew's re-election as a director. (Full story)
|
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||
