Amrad: meeting to solve board dispute

Amrad Corporation (ASX: AML) has confirmed a general meeting will be held on May 22 to resolve a board dispute with its major shareholder, Fibre Optics.

In an information package sent to shareholders, Amrad has urged its investors to vote against a proposal to oust three of its board members, including its chairman, in favour of three directors nominated by the wholly owned Circadian subsidiary.

"It is not in your interests to allow nominees of a shareholder that owns 19 per cent of the company to attain 50 per cent board representation and for one of those nominees to be appointed chairman," the company has told shareholders.

However, Amrad gave a little ground by promising to invite Circadian nominee Bob Moses to become a non-executive director if the motion failed.

An existing non-executive director, Ian Ferres, said Moses would be an additional board member and would not replace any of the incumbents.

"We would invite Moses to the board because he's got an extensive background in Australian and international business, particularly in biotech," Ferres told Australian Biotechnology News.

"He has a background in negotiating deals for CSL and would add value to the existing directors."

Circadian, which owns 19.3 per cent of Amrad, has proposed to replace chairman Prof John Mills and directors Helen Cameron and Jeremy Curnock Cook with Olaf O'Duill, Ian Davis and Moses.

Despite Amrad's protests to the contrary, Circadian has consistently denied any intention to take control of the company, saying the legal requirements on company directors were quite clear.

Ferres said that while Circadian was technically correct on that count, its fears of board control being lost to the challenger remained.

"Circadian has a view as to the changes they want to make and it would make no sense for them to ask people to join the board who didn't agree with those views," he said.

"It would be normal for these people to have formed a view and it puts our managing director in a difficult position."

Ferres said the proposed changes to the board would leave it comprising three Circadian nominated non-executives, two Amrad non-executives and one executive director.

"It then comes down to their view dominating the board," he said.

After Circadian, Amrad's next largest shareholder is Victorian State Trustees, whose voting decision on such matters is directed by the Treasurer, John Brumby.

While Circadian has said it believed the government should refrain from voting, Amrad thinks its should use its right.

It remains unclear which way, if at all, the trustees will cast their vote at the meeting.

The Victorian Government established Amrad with seed capital of $15 million in 1986, which Ferres said had been returned with interest since the company's float in 1996.