VRI board tussle intensifies

Further to moves by shareholder Australian Heritage Group (AHT) to shake out the board at VRI BioMedical, the war of words has intensified after a flurry of shareholder requisitions, withdrawals and accusations flying between the two companies.

"We originally sent VRI a requisition to hold a general meeting after hearing through the grapevine that (they) did not want to talk to us," said Sally Capp, director of AHT, a Perth-based investment house and one of VRI's largest shareholders.

According to Capp, the original general meeting requisition letter was sent after AHT attempted to negotiate several changes in VRI's board plus some alterations to the company's reporting structure.

This would have seen "some new board members, some resignations from the board and a new reporting structure to empower and support the chief executive officer... to drive the business," according to a letter sent to VRI shareholders.

Capp asserted that VRI was in need of a change in order to trim costs and run more effectively. She claimed that VRI's current organisational structure was "ineffectual", and that there was a likelihood of a scaling-down of operations in Perth, the original home of the company.

"There is no need for an executive chairman as well as a CEO, plus the company needs to be structured to work from Sydney where all the staff are -- not to report to a chairman in Perth which brings accompanying confusion," she noted.

Subsequent to the initial requisition, the current VRI board agreed last Thursday to a proposed meeting with AHT. "But they didn't want to talk," asserted Capp. This resulted in AHT firing off yet another requisition on Friday. This contained references to VRI's Sydney-based CEO, Dr Peter French, indicating that he expressed a measure of support for the AHT camp.

The next salvo came from French, who issued a denial that he "had not consented, nor would consent, to being nominated as a director of VRI BioMedical by Australian Heritage Group." This prompted a third, updated requisition from AHT which issued a revised list of board exits and entrances, this time without naming French, who declined to comment on the stoush by press time.

Acting chairman Kenneth Baxter was deeply critical of what he saw as AHT's motives, adding that his take was that AHT was merely rattling sabres in advance of financial gain.

"In my personal assessment, they are trying to talk down the value of the company, get hold of it with a minority shareholding and then by some means -- possibly talking up the share price, selling out at a profit, leaving the company as a shell," he said.

"In the absence of any other substantive information to the contrary, it is difficult to see any other motive."

Baxter also said that many of the changes mentioned by AHT in its letter to shareholders were already being implemented -- and that the replacement members proffered by AHT were unknown quantities who added nothing to the value of the company.

"We wanted to wait for commercialisation, when it was agreed that [VRI chairman] Leon [Ivory] would become chairman once Dr French had provided results. This was agreed well before all the AHT nonsense," he added.

Meanwhile, Kim Slatyer, the only board member AHT originally wanted to remain on the board, resigned his position on Friday.

AHT's requisition demands an extraordinary general meeting be held within two months, until which time it seems unlikely the opposing factions will come to some amicable agreement.

"We have a highly competent board, and Dr French is perfectly happy where he is. I think AHT will have to reconsider their position -- look at the AHT share prices recently, then VRI shares and make your own conclusions," said Baxter.