Fund managers seek Fletcher answers

Friday 26th January 2001

Institutional shareholders are demanding answers after the shock resignation of a senior executive at Fletcher Challenge.

On Wednesday the company said the chief executive designate of the group's building materials and construction division, Alexander Toldte, would not take up his job.

Fletcher Building shares fell nearly 9% after the news.

Arcus Investment Management head of equities Simon Botherway said he was disappointed with the news. He would seek a clarification from the company. He declined to comment further until he had met Fletcher Challenge executives.

Another fund manager who declined to be named said a return to the "old guard" of the building division's board would not be looked on favourably.

"The company needs a new beginning - the appointment of a new board is the key issue," he added.

On Wednesday, brokers said it appeared Toldte had not been given the opportunity to have an input on the new board's composition nor a free hand to set the company's new course as a separate entity.

Colonial First State investment manager Mike Gibbs Harris said Toldte was well regarded and without him it might take more time to realise the value that was definitely in FCL Building.

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