Vertex directors seek legal direction on board composition

Managing director Paddy Boyle and independent director Sandy Maier made an announcement following a board meeting of the company at which Boyle and Maier sought the resignation of the other three directors appointed in September as a consequence of Masthead Ltd acquiring a 19.9% interest in the company.

The resolution to test the validity of the appointments was supported at the board meeting by Boyle and Maier and opposed by Mark Stewart and Warwick Webb.

The Chairman, Warren Bell, abstained from voting on the issue.

Boyle and Maier say they believe that the resolution was passed because the votes of Stewart and Webb did not count as they had not been validly appointed as directors and were interested parties to the resolution.

This follows the purchase of a 19.9% interest in the company by Masthead Ltd from interests associated with George Gould in September and the replacement, through block resolution, of Messrs Gould, Arscott and Rolleston with Stewart, Webb and Bell on the board.

Boyle said issues had arisen over Masthead's shareholding in Alto Plastics which competes with up to one third of Vertex's business. While the company has attempted to deal with this by limiting information given to the Masthead nominated, Gould appointed directors on these aspects of Vertex's business, this has not proved satisfactory. This caused Boyle and Maier to consider the validity of the appointments themselves.

"We are seeking an urgent court ruling on whether the appointment of these three directors in September was legal," said Boyle.

"If the court ruling confirms the appointments were invalid, or otherwise approves the actions proposed, we will immediately call for nominations for four directors to replace the three appointed in September and to bring the board up to its full complement of six."

"We believe that the vast majority of Vertex shareholders will welcome the establishment of more visible independence at board level and this also will be more supportive for company growth."

"This is about ensuring the Vertex shareholders and the market in general can have the highest confidence in the ability of the Board to act solely in the best interests of the company and adhere to the highest standards of corporate governance without potentially conflicting distractions."

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