Tony Gibbs has been dumped from the board of Guinness Peat Group, after making an unauthorised statement objecting to the investment company's plan to spin off its Australian assets.
"This action has been taken with much sadness but was unavoidable," chairman Ron Brierley said in a statement today. "Tony wasa 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," he said. "In the circumstances, there was no alternative to the action taken".
Gibbs initially signed off on the demerger plan that was announced on June 16 but told BusinessWire yesterday he did so "for all the wrong reasons." He was not ashamed of his decision to make his personal statement last Friday, he said.
Instead of a demerger, Gibbs advocated a "material cash distribution" to shareholders before the end of the year and preparation of Coats, its largest investment, for sale. He warned against spending six months and shareholder funds to try to advance the demerger.
Gibbs's departure is a victory for fellow director Gary Weiss, who would take control of the Australian assets once they were spun off. Brierley and Weiss had shared offices in Sydney's CBD.
Still, Brierley announced the appointment of three independent, non-executive directors to the board with a mandate to review the demerger plan and consult with shareholders.
Brierley said Gibbs's alternative plan "fails to take account of the complexities inherent in GPG's current structure."
The group also had to deal with tax complexities across various jurisdictions and Coats, while on the mend, isn't at the stage to be sold via an initial public offering.
Brierley said the remaining executive directors won't participate in any decisions by the board relating to the restructure.
"My sole objective remains optimising value for GPG shareholders and I believe GPG's current business needs to be simplified and streamlined to enable this," he said.
