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Jamie Gray

Jamie Gray is a business reporter for the New Zealand Herald and NZME. news service.

Shareholders oppose Brierley re-election

Shareholders say they have lost confidence in Sir Ron Brierley, founder of the Guinness Peat Group.
Shareholders say they have lost confidence in Sir Ron Brierley, founder of the Guinness Peat Group.

The New Zealand Shareholders Association said it will vote against the re-election of Sir Ron Brierley to the board of the company he founded - Guiness Peat Group (GPG) - and urged other other shareholders to do likewise.

The association said it would vote the undirected proxies it holds against the re-election Brierley at GPG's annual meeting on May 24 in Auckland.

Association chairman John Hawkins said that while Brierley may still enjoy some support among older investors hankering for "the good old days'', when the company operated successfully as an investment company, the reality was that GPG had faded under Brierley's chairmanship in recent times.

GPG is in the throes of divesting its Australian and New Zealand assets and is effectively being wound up.

Brierley has previously voiced his opposition to a break-up.

"Requirements around disclosure and transparency do not suit his style and Sir Ron has not adapted to the changing environment,'' Hawkins said in a statement.

"We are not alone in our views with a number of large institutional shareholders coming to the same conclusion,'' he said.

Brierley ceded the chair and much of his influence when a shareholder revolt in late 2010 led to the appointment of several new independent directors.

Subsequently, they reached the conclusion that GPG's business model was broken and an orderly wind-down was the best solution.

The company is now chaired by Rob Campbell.

Hawkins said that the 2011 GPG annual report was the first time the company had been open with shareholders, and that it was "not pleasant reading''.

"Despite that, it was far better to have the truth and be able to make informed choices,'' he said.

Since the changes, Hawkins said Brierley's attendance at 2011 board and subcommittee meetings had been poor.

"This is completely unacceptable to investors who require all directors to apply themselves diligently and enthusiastically to the benefit of the company and shareholders,'' Hawkins said.

"Sir Ron undoubtedly has skills, but these are very different to those now required by GPG, so it is hard to see what special value he brings to the GPG board table,'' said Hawkins.

"With his long history of paying lip service to corporate governance and ignoring shareholder concerns, we now view Sir Ron as a negative influence on the company,'' Hawkins said.

At last year's annual meeting, shareholders were left in no doubt that GPG's corporate raiding days were a thing of the past.

GPG's biggest asset is UK-based Coats _ a leading threadmaker and the world's second largest zip maker.

In New Zealand's GPG assets include a 35 per cent stake in insurance company, Tower.

Despite the well publicised shake-out, Brierley and Blake Nixon, who was originally appointed to the board in 1990, remain on the board.

The association, which blamed Nixon in part for GPG's underperformance, unsuccessfully opposed his re-election last year.

- APNZ

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