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Lew loses seat on Coles board
By Geoff Hiscock
SYDNEY, Australia (CNN) -- Dissident director Solomon Lew has lost his bitter boardroom battle at Australian retailing giant Coles Myer. Lew, a former chairman of Coles Myer, was dumped from the board at the company's annual general meeting in Melbourne on Wednesday, beaten by proxy votes. His re-election was opposed by Coles Myer chairman Rick Allert, chief executive John Fletcher, and six other directors on the 10-member board. These directors sent a letter to shareholders last month saying Lew should not be returned to the board because he had already served for 17 years, he had extensive related-party transactions and he and his family had interests that competed directly with the company. Coles Myer is one of the most widely held companies in Australia, with 560,000 shareholders. Lew is the single largest shareholder, through his 51 percent-held Premier Investments, which has a 5.9 percent stake. Another 3.8 percent of Coles Myer is held by First Retail Investments, controlled by the Lew family. Lew waged an extensive re-election campaign, claiming he was the only director with broad retail experience. He also had been calling for an independent inquiry into "Project Gold" -- a plan to break up the company. Premier Investments had claimed Project Gold would likely have seen the "hasty demerger" of the Myer Grace Bros. and Target stores from the Coles Myer group. Allert rejected Premier's call for a review, saying it was "totally unncessary and a waste of shareholder funds". Restructure on hold
Coles Myer, which turned over Aust. $25.7 billion ($14 billion) last financial year through its Coles and Bi-Lo supermarkets and its Kmart, Target and Myer Grace Bros stores, has been looking to spin off under-performing units. But on October 1 it said any restructure of the group was on hold until at least July 2003. It cited the importance of the coming Christmas trading period. (Full story) Fletcher told shareholders on Wednesday the company would likely achieve a full-year profit in 2002-03 of about A$425-$435 million ($238-$244 million), assuming a satisfactory Christmas period. This is about 22-23 percent above the 2001-02 net profit of A$354 million ($192 million) revealed by Fletcher last month. Coles Myer stock has fallen 24 percent this year on missed profit forecasts and the long-running stoush between Lew and other board members. It last traded at A$6.39 on Tuesday and was suspended Wednesday ahead of the shareholders meeting. The shares touched a five-year low of A$5.70 on September 6.
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