Paperlinx backs Boon to stay as Price turns up the heat

The Paperlinx board continues to "fully support" chairman Harry Boon in the face of Andrew Price's leadership challenge, despite acknowledging "the company's poor financial performance".

The board has scheduled an Extraordinary General Meeting for 23 March, where Price's charge on the leadership will be put to the vote.

Price said he had been "inundated" with support since announcing the challenge on 3 February.

"This has confirmed what we believed, the current board is friendless – not unsurprising given the over 98% destruction of shareholder value," he said.

"I cannot imagine a single reason why any shareholder would support Mr Boon. He has served on the board since 2008, the time during which the most disastrous decisions were made."

However, Paperlinx's board said it would continue backing Boon because the company had been stabilised due to "significant restructuring" and an ongoing strategic review.

Price said the strategic review was not worth waiting for.

"Why do they need outsiders to conduct this review at great shareholder expense when the problems with this business are so obvious?" he asked.

"Most importantly the same outsiders are the ones trying to flog the company off to private equity. They have been spruiking the wisdom of the sale in recent weeks. If this isn't a conflict of interest, I don't know what is."

Price questioned the board's decision to proceed to the Extraordinary General Meeting rather than force Boon to resign.

He said it "might indicate that they are more concerned with the personal interests of Mr Boon than that of all shareholders and calls into question their independence. It also, I believe, shows just how disconnected Mr Boon is from his shareholders."

Price also dismissed the board's call to share his ideas for improving the company, claiming Boon was "part of the problem, not the solution".

"This company needs strong leadership, stakeholders want to see people committed to their ideas and prepared to back themselves by investing their own money," he said.

"I have about 6 million shares and Mr Boon has about 21,000. Actions speak louder than words, all stakeholders can clearly see who is more committed to this business."

Paperlinx did not comment when contacted by ProPrint this morning.