Tower board at odds over GPG move

By PAULA OLIVER

Tower's latest board meeting has failed to resolve a dispute between its independent directors and major shareholder Guinness Peat Group.

Chairman Olaf O'Duill yesterday told the Business Herald that the meeting in Sydney on Tuesday had determined to seek further advice on how to tackle the dispute.

The trouble arose when GPG sold shares to itself to satisfy an underwriting agreement it had with Tower as part of the insurer's recapitalisation last year.

GPG had legal advice that its cunning manoeuvre complied with the agreement, but Tower's independent directors disagreed.

O'Duill stressed that the mood around the Tower board table was "very good", and that the disagreement was not causing discord between GPG and the other directors.

"There's no doubt we do disagree with GPG on this. The issue is what to do about it. And that's a tough one," O'Duill said.

The problem of how to resolve the disagreement centred on the fact that if GPG now sold the six million shares under scrutiny as a parcel, it could adversely affect the share price for all shareholders.

O'Duill said that a special committee had been set up to seek advice on a way forward.

If the advice was that it was better to do nothing, then so be it, O'Duill said.

But if it was to go ahead and do something, then it would be done.

"The one thing is, whatever action is taken now, we don't want it to be disadvantageous to shareholders."