Gibbs 'ashamed' at GPG demerger support

Tony Gibbs says speaking out against the demerger was a matter of principle. Photo / Greg Bowker

Tony Gibbs says he is now ashamed of his initial decision to back Guinness Peat Group's demerger proposal and knew speaking out against it would get him fired from the board.

But, he says, he had to do it as a matter of principle.

"It was important to me. I was struggling with myself. The choice was between doing the right thing and not wanting to let my colleagues down."

GPG yesterday announced the board had terminated the appointment of Gibbs as an an executive director and had resolved that his office as a director be vacated.

The statement came in reaction to a personal statement filed by Gibbs on the stock exchange on Friday.

In it he called for GPG's proposal to split off the Australian assets and list them separately to be abandoned in favour of a new approach.

The company said Gibbs' statement had not been seen or authorised by the board and it was "disappointed" he chose to express his views publicly without consultation.

Chairman Sir Ron Brierley said the decision to terminate Gibbs' role had been "taken with much sadness but was unavoidable".

"Tony was a great achiever for GPG in earlier times and we worked together, closely and effectively, for nearly 20 years. More recently, however, there have been increasing difficulties, culminating in last week's serious breach of boardroom protocol."

Gibbs said the phone call to terminate his role had been professional but was tinged with emotion.

"There was no aggravation. It was what I would call a very grown up conversation. Nobody was agitated. They went through the process ... it was a very sad meeting.

"I have known Ron Brierley for 30 years and worked with Gary Weiss for 20 years. We have all been very close confidantes."

Gibbs will stay on as chairman of Turners and Growers and said he had support from GPG to continue as chairman of Tower. But Gibbs, who owns about 10 million shares in GPG, made it clear he would not try to stop the proposal going ahead.

"I don't know how it is going to come out. I am not leading a crusade against this board or GPG. This has been a matter of principle for me."

His departure was viewed unfavourably by some New Zealand investors.

Tyndall Investment Management's Rickey Ward said it was disappointing.

"Tony just echoed what shareholders wanted. I think there were better ways to do this. This is a guy that has presented what shareholders want and the other directors simply haven't been listening."

New Zealand Shareholders Association chairman elect John Hawkins said Gibbs' sacking was not surprising.

"I think it is regretful from the perspective of the New Zealand shareholders. Tony knew he had signed his own death warrant when he released that statement."

GPG's share price dropped 5c from 68c to 63c in response to the news. It closed down 2c on 66c.

Others were less concerned about Gibbs' dismissal. BT Funds Management portfolio manager Matthew Goodson said he did not have an attachment to any one director. "All we want is the best thing for shareholders. At the end of the day I don't know if it will change the value of the assets."

Gibbs' statement on Friday proposed giving investors a material cash payout before the end of the year, restructuring the GPG business to allow threadmaking company Coats to be floated and either floating or selling Coats next year, giving the proceeds back to investors.

GPG's board yesterday said this was inappropriate because it "failed to take into account the complexities inherent in GPG's current structure". But in light of feedback from shareholders it intended to appoint up to three independent non-executive directors to the board as soon as possible.

An independent sub-committee would be set up including the non-executive directors to review the proposal, consider variations and consult with shareholders. Brierley said executive directors would not participate in any decisions by the board relating to the restructure.

Ward said who the board now picked as its new independent directors was critical. "They are going to have to have damn thick skin to be on a board that has just got rid of one of their own. The quality of the independents will be paramount."

ACC portfolio manager Nicholas Bagnall said he wanted the board to consult with shareholders on their recommendations.

But Hawkins said it was hard to see the company making truly independent appointments given its history.

"The leopard doesn't change its spots. This board has as much chance of making independent board appointments as the Pope has of appointing the Archbishop of Canterbury to run the Vatican."

THE SPLIT SPAT
* June 16: GPG's demerger and restructure plan is announced, and panned by New Zealand shareholders.
* June 17 & 18: Director Gary Weiss, seen as the man behind the plan, visits New Zealand shareholders to canvass views.
* June 25: Director Tony Gibbs calls for plan to be abandoned.
* June 29: GPG board fires Gibbs.