Tom Arup Age
THE four biggest investors in Tasmanian logging company Gunns have expressed fears that its chief executive John Gay has too much power and that the Bell Bay pulp mill may be unable to find finance. In a series of confidential meetings in July and August last year, details of which have now been obtained by The Age, representatives of Perpetual, Concord Capital, Perennial Investment Partners and Schroder Investment Management told Gunns board members, including Mr Gay, that the company needed corporate reform and more independence on the board. Those four institutional investors, which control just under 50 per cent of the company’s shares, also expressed serious concerns about the ability of the $2.2 billion pulp mill project to attract finance in the current economic climate. Three sources who spoke to The Age on the condition of anonymity, including two who were involved in some of the meetings, have confirmed that the institutional shareholders are now seeking to replace some existing members of the board, though not Mr Gay. The investors did ask Mr Gay to step down from one of his two roles — as chairman and executive director — to ensure greater independence on the board. He has agreed to do so early this year. Read more here
And: Philip Hopkins and Tom Arup. January 10, 2009: Gunns is now free to build its Bell Bay pulp mill but potential lenders will wonder how prudent it is to proceed. “SHOW me the money.” The line from the film Jerry Maguire is now the name of the game for Gunns. The timber giant has entered the back straight in its four-year quest to build a $2.2 billion pulp mill at Bell Bay in northern Tasmania. After a prolonged and eventful process marked by community divisions, environmental protests and accusations of political cronyism, this week Federal Environment Minister Peter Garrett effectively approved the controversial project. Gunns’ big gamble: Read more here
