By Rob Hosking
Friday 28th March 2003
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"When you are growing rapidly by acquisition, it can mask underlying operating inefficiencies for a long time and regrettably we fell into that trap," he told shareholders.
Three directors were stepping down "in the spirit of accountability, and former group managing director James Boonzaier had already departed.
Mr O'Duill noted the issue of retirement allowances for directors had received a great deal of publicity but, unlike executives in some other companies, he has not blamed the media for this.
The issue had received attention "with good reason," he said.
"I personally have a problem with failed chief executives in some cases walking away with tens of millions of dollars."
However, the courts would stand behind a contract containing such an entitlement, he told shareholders.
In reply to one shareholder who said too many directors had 20 or more other directorships, Mr O'Duill said he knew of none holding that many.
He also said companies like Tower were in a competitive market for directorships.
"There is a basis of fairness and reasonableness in hiring directors, just as there is in hiring any other employees."
If shareholders wanted the best-calibre people on the board they would have to be prepared to pay for them, he told the meeting.
Tower made a loss of $75 million for the year to September 2002, with the company's Australian expansion responsible for the bulk of that loss. The first quarter of the current year, however, has been profitable.
But the company is still in a "remedial situation," he said.
"Dividends will be resumed as soon as the profitability and capital position of Tower are at appropriate levels and it is most unlikely that a dividend will be declared in respect of the period to March 31, 2003," he said.
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