Sir Ron's parting shot - inflated egos sunk BIL

Thursday 22nd March 2001

SIR RON BRIERLEY: Extremely disappointed

By Nick Stride

Brierley Investments should have wound itself up in 1986 or 1987 and returned its capital to shareholders, founder Sir Ron Brierley says.

Sir Ron, who resigned from the BIL board last Friday, said yesterday the company's management since he retired as chairman had been extremely disappointing.

"At the start of the 1990s the share price was around $1.70. Even if you'd just held your ground during the 1990s you'd expect that would lift to be $4 or $5, at least 10 times what their current price is. That's the real loss during that decade and that's an absolute tragedy."

"It was caused by people who had a completely inflated view of their own capacities. I couldn't put it more gently than that," Sir Ron said.

"It's not just the appalling performance of the 1990s, it's the lost opportunities."

He said the "specific catalyst" of his resignation was the company's 40th anniversary. His role at BIL was becoming increasingly tenuous.

Asked if the company's fortunes could be turned around under the new ownership and management, he said: "What fortunes are there to turn around?"

"BIL's basically an investment-management company. I suppose it's got as good or bad an opportunity as anybody else to do what it wants with the funds under its control. I don't think it has any special advantages any more."

He said it was clear in retrospect that every company has an optimum point. BIL went from nothing to having a huge capitalisation in New Zealand terms. Clearly its optimum point was sometime in 1986 or early 1987.

"If everyone had said then, 'well, we've done the job now, we've reached our target, that's it, sell up, give the money back,' that would have been a fantastic achievement. But then again, if we'd done that it just would have looked eccentric."

Sir Ron remains chairman of Guinness Peat Group but he has made it clear from the outset the company will be wound up and the capital returned to shareholders at some stage.

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