Independents say Tower election rigged

By KEVIN TAYLOR

Guinness Peat Group will get at least 25 per cent control of the Tower board even though it has only 9.9 per cent of the shares, says an independent board candidate.

Don Baskerville, and small shareholder Donald Kincaid, say the race to fill three vacant spots on Tower's board has been rigged.

Tower's annual meeting on March 27, when the vote will be taken, is sure to be fiery after a $74.9 million loss for the September year.

GPG, which boosted its stake to 9.9 per cent last month, is backing its own candidates, Tony Gibbs and Gary Weiss.

Long-serving Tower chairman Colin Beyer is retiring as both chairman and a director, and Tower is supporting the two GPG candidates.

Baskerville, a Wellington businessman, said if GPG was successful in its strategy a 9.9 per cent shareholder would have 25 per cent of the board's directors.

In addition, reports that GPG was lining up a friendly Australian director meant it would control or influence 37.5 per cent of the board.

"The present Tower board is endorsing this raid," Baskerville said.

The board has the power to co-opt after the annual meeting if a seat is not filled.

Also standing as an independent at the annual meeting is Hutton Peacock, a former chief executive of Government Life, Tower's predecessor.

But Baskerville said institutional shareholders were backing GPG's directors.

"I have been told explicitly that these same voters will withhold their votes from me and from Hutton to increase the chance that neither of us will attain the requirement to be supported by 50 per cent of votes cast.

"Inactivity on the part of small shareholders will result in two GPG directors being elected and with a distinct possibility that no independent directors will be successful."

Baskerville said he and Peacock had a vast amount of industry experience and were concerned about the interests of all shareholders.

Kincaid, a small Tower shareholder who has been agitating for board changes since the grim annual result, called for shareholders to support Baskerville and Peacock.

"I don't support what GPG is doing.

"They are raiders after all, and I don't think raiders are the appropriate people to have a position in something like Tower at this time."

Kincaid said the election was being stitched up so just Gibbs and Weiss would be elected.

He said now Beyer was going he had withdrawn his own resolution to the annual meeting that the entire board go.

Peacock and Gibbs could not be contacted.

The board meets early next week in Sydney, but Tower yesterday refused to divulge what day and whether the retirement pay of the three resigning directors was on the agenda.

Together their payments could cost struggling Tower hundreds of thousands of dollars, with Beyer's retirement payment alone set to be more than $300,000.

The retirement rules are in Tower's constitution but payments require board approval.