Financial services company Tower named two new directors yesterday - and was immediately savaged by 9.5 per cent shareholder Hanover Group for ignoring its case for representation.
Tower chairman Olaf O'Duill said the appointment of John Spencer and Maurice Loomes as directors was part of restructuring after huge losses.
Spencer is chairmanof Tainui Group Holdings, a director of the National Institute of Water and Atmospheric Research and was chief executive of New Zealand Dairy Group before Fonterra was formed.
Sydney-based Loomes is a director of Turners and Growers, Turners Auctions, chairman of Canberra Investment Corporation, and was formerly a director of Guinness Peat Group, which is a 17 per cent shareholder in Tower.
This announcement sparked Hanover executive chairman Mark Hotchin to accuse O'Duill of blatantly siding with GPG in its efforts to control Tower.
"Hanover Group has made several formal requests to the Tower Board for board representation," Hotchin said, but it was clear that O'Duill was "prepared to publicly side with GPG and effectively block any other shareholders with views which didn't coincide with GPG's."
Hotchin said he found recent comments by O'Duill - such as a report that he was concerned at "Hanover's obvious opposition to whatever GPG is doing" - "highly offensive" coming from someone who should be a neutral chairman. It was, he said, clear that GPG had absolute control of the company and of the board from a minority shareholding position.
"We and most of the market have said all along that GPG were controlling the company and that ordinary shareholders were not being fairly treated," Hotchin said.
"It is now time for the regulatory authorities to take a stronger line with GPG."
Hotchin said O'Duill was being inconsistent in refusing Hanover's request for one board representative for its 9.5 per cent shareholding, considering Tower had earlier granted GPG two board seats at that level of shareholding.
The two new directors will be subject to re-election at the Tower annual meeting next year.
