Vic govt decision could spell fate of Amrad board

The fate of Amrad Corporation's beleaguered board could fall in the lap of Victorian Treasurer and Innovation Minister John Brumby.

Circadian Technologies subsidiary Fibre Optics, which holds about 19 per cent of Amrad's shares, has proposed three of the company's directors - including its chairman - be replaced with three of its own selection.

The major shareholder has called for a general meeting next month to resolve the problem, which, despite Amrad's insistence it be dealt with internally, shows no sign of blowing over.

This leaves the next largest shareholder, State Trustees of Victoria, with the strongest voting clout should the meeting go-ahead.

State Trustees owns almost 17 per cent of Amrad shares - a total of 19.7 million, currently worth about $14 million, down from about $22 million a month ago.

Circadian executive director Graeme Kaufman said that while the weight of his company's argument would probably encourage the government to vote in its favour, he believed State Trustees should abstain.

"We're suggesting they abstain because the role of the government is to let the people who have put funds into the company over the years make the decision," Kaufman said.

While he would not comment on whether Circadian had discussed the issue with the government, he said he believed a decision on whether or not it would get involved had not been made.

As Treasurer, Brumby would have responsibility for directing the trustees' votes, Kaufman said.

The minister was not available for comment on the issue today.

The Victorian Government established Amrad with seed capital in 1986 to commercialise medical research in the state, with the company going public a decade later.

With its 130 million shares currently worth about 70 cents, the company's market capitalisation is hovering above $91 million.

This compares to a market cap of about $151 million on March 1 before the string of bad news that saw the stock tumble from $1.16 to today's sub-70 cent trading price.

Amrad's 10 largest shareholders as at 20 August 2001:

• Fibre Optics (Australia): 22.4 million shares (19.1 per cent)
• State Trustees Ltd: 19.7 million shares (16.7 per cent)
• Chugai Pharmaceutical Co Ltd: 11.8 million shares (10.1 per cent)
• GIO Insurance Ltd: 4.5 million shares (3.8 per cent)
• National Nominees Ltd: 4 million shares (3.4 per cent)
• Merck Sharp & Dohme (Australia) Pty Limited: 3.6 million shares (3.1 per cent)
• Victorian Medical Consortium Pty Ltd: 3.4 million shares (2.9 per cent)
• Queensland Investment Corporation : 2.4 million shares (2.1 per cent) *
• Walter And Eliza Hall Institute of Medical Research: 2 million shares (1.7 per cent)
• Westpac Custodian Nominees Ltd: 1.5 million shares (1.3 per cent)

* On March 22, Queensland Investment Corporation raised its holding in Amrad to 7.1 million ordinary shares, giving it a 5.45 per cent stake.