Montana jury meets to sentence offender

By DITA DE BONI liquor writer

The wonders of modern technology will cross continents and oceans today to connect four independent directors deliberating over the fate of Montana Wines.

Barry Neville-White is charged with rounding up globetrotting directors Hylton LeGrice, Bryan Mogridge and Peter Coote, as well as the board's legal counsel, to decide how to punish Lion Nathan for jumping the gun on its purchase of Montana shares.

Mr Neville-White would not give much away when contacted last night but said deciding Lion's punishment "could take time."

"We want to get it right. We won't be prevaricating once we get it right."

Montana company secretary John Nuthall, who will also act as secretary for the group, said there were too many steps for a quick decision, which was "extremely difficult" for the independent directors.

While a stock exchange committee has made a ruling on the issue of defaulters, it has not given definitive decisions on remedies.

If the Montana board, Lion Nathan and Allied Domecq do not agree, it could be called in again.

Mr Neville-White was reluctant to say how he viewed the positions taken by Lion Nathan and Allied Domecq, except to say the listing rules which covered defaulter securities were "draconian, and not specific ... Where there is a lot of discretion given we will use it wisely."

Lion Nathan, which had its own meetings yesterday to discuss the ramifications of the ruling, also used the mot du jour to describe rules around defaulter securities which could see it stripped of its entire 62 per cent holding in Montana.

Investor relations director Warwick Bryan declared the rules "draconian" and said the committee had effectively changed the rules by finding fault with Lion and its broker CSFB's conduct.

"We've taken no decision on a judicial review [on the committee's findings] but have to say we were surprised at [the findings]. [They] will certainly have huge implications for the broking community."

Analysts also described the defaulter securities rules as draconian.

Act MP Stephen Franks agreed, telling National Radio that was his intention when he designed the rules.

The point, he stressed, was to put the defaulting party back where it was before the faulty transaction took place.

Under that scenario, Lion's holding would drop to 28 per cent, a slim majority over Allied's 26 per cent.

Allied Domecq is believed to be keen to add its own voice on the issue, arguing that it has a substantial stake in Montana although no representation at board level.

Allied's Jane Mussared said the rulings for the stock exchange provided for "draconian consequences" in cases of default "and we believe that those rulings should apply in this case."

Mr Neville-White said the independent directors intended to talk to those involved about the fate of Lion's shareholding once the directors were better briefed.