The gloves are off in Perth in the fight between Seven network proprietor Kerry Stokes and the floundering board of West Australian Newspapers.
Stokes has this morning launched an action to remove the board and its non executive directors after being rebuffed in attempts to get two seats in respect of the Seven Network’s 19.4% shareholding in WA newspapers.
Stokes has moved to force a special shareholders meeting with a view to tipping out all non-executive directors, from chairman Peter Mansell down. WAN rushed out its defence statement at 9am before the Seven statement was released by the ASX just after 11am.
In his letter Stokes said “We have been appalled at the lack of leadership of the board and the resulting performance of the company”. He continued:
Financially the reduction in the current dividend is symptomatic of the Board’s performance. It is the only major media company in Australia forced to reduce its dividend payment, even against a strong local company. As the largest shareholder in WAN, we have watched these developments with concern. We have tried to put the arguments to the board but they have failed to manage the business. They have had ample time to correct these ongoing issues.
“The continuing poor performance became evident to us over six months ago and prior to the AGM we sought two board positions. The Board engaged with us before the AGM but we were then rebuffed,” Mr Stokes said in today’s statement to the ASX.
Seven said it is not seeking board control of WAN and “believes WAN should continue to be an independent newspaper that serves the interest of all of its shareholders and the West Australian community.”
Mr Stokes said he and his right hand man and fellow Seven Network director, Peter Gammell, will nominate for the board.
“Seven accepts to WAN Board’s position that five is the appropriate number of board directors and we are nominating to fill two positions. Seven urges other WAN shareholders to nominate appropriate candidates to fill other board positions,” the Seven statement read.
WAN’s results have been disappointing: while ad revenues are up, circulation revenue at the West Australian has fallen in the past year for the Monday to Friday and the Saturday edition and Stokes said in his statement that there was an increasing danger that the Saturday West Australian would be passed by the Sunday Times of New Ltd in terms of sales, “with obvious serious implications for advertising”.