..Lew will fight on if loses today, page-10

Now this..AFR again

Lew to lose board seat
Nov 20 15:23
Adam Shand and Giles Parkinson

Solomon Lew appears to have lost his seat on the board of Coles Myer Ltd despite receiving more than 260 million proxy votes in his favour following a $10 million campaign for re-election.Chairman Rick Allert told shareholders at a marathon annual general meeting in Melbourne that 268 million proxy votes supported the re-election of Mr Lew, with 295 million going against him.

Mr Allert also held 50 million proxy votes which he said would have been voted against Mr Lew if necessary.An ally of Mr Lew, Mark Leibler, was returned by a vote of 276.5 million for and 256.2 million against. Mr Allert also held votes which he said would be voted for Mr Leibler.Nine other candidates failed to gain a seat. The company will release the final votes later on Wednesday.

Mr Lew, who lifted his stake in the company to nearly 10 per cent from 5.4 per cent during the past month, earlier told the meeting in Melbourne that he had received proxy votes in his favour from 170,000 of the company's 560,000 retail investors, but did not expect to be voted back in.

However, he said he had a mandate to continue to push for change on the board and in the company's strategy. He has opposed the scrapping of the shareholder discount card and has criticised chief executive John Fletcher for his lack of retail experience.

"More than 170,000 households filled in a proxy and voted for me and it gives me some kind of mandate," Mr Lew said. "I'm not going to let them down."The vote came at the end of a five hour meeting during which time each candidate spoke to the audience, and many shareholders criticised the board and management over the company's poor profit and share price performance.

The company reassured investors that its earnings were on track, although it conceded the turnaround of the troubled Myer Grace stores was taking longer than planned.Chief executive John Fletcher told the meeting that the company's full-year earnings should be in line with market forecasts of $425 million to $435 million."

"On outlook, we would expect that subject to a satisfactory Christmas trading period, full year earnings will be in line with current market expectations," he told the meeting.

"This excludes any potential one-off non-cash charge this year from an anticipated change in United States accounting standards which may affect inventory valuations."

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Chairman Rick Allert said that the company is maintaining its forecast total savings in business costs of $300 million by the end of fiscal 2004. However, the meeting has been dominated by aggressive questioning and complaints from a variety of shareholders, including one woman who said the entire board should stand up, turn around and have "their butts kicked."

Mr Lew has opposed the company's proposal to study a break-up of the group and has also promised to reverse the decision to cancel the shareholder discount card.

Mr Allert said he wanted to create a board culture where directors engage in vigorous and healthy debate, but he wanted to limit the debate to the boardroom.