Paperlinx calls coup leader Price a 'substantial risk'

The battle for the Paperlinx leadership has intensified with the board branding coup leader Andrew Price a "substantial risk" and Price accusing the incumbent of incompetence.

Paperlinx advised shareholders on Monday to back chairman Harry Boon at Friday's Extraordinary General Meeting as Price's attempted coup had "threatened the organisation's stability" and would "put the company's recovery plan at substantial risk" if it succeeded.

Price was accused of lacking international experience and not understanding Paperlinx's "complex" financial position and its "delicate" relationships with suppliers, credit insurers and lenders.

However, Price told ProPrint he had a successful track record of multi-currency and multi-country investing and had spoken to three international paper mills in the past 24 hours.

"I have a better understanding of the relationship with suppliers than Mr Boon does. I have much better paper knowledge than he could ever wish to have," he said.

Price also said it was hypocritical of Boon to call him a threat to Paperlinx's stability.

"Anyone who has overseen a decline from $2.80 to six cents in the share price is hardly in a position to talk about stability," he said.

Monday's statement also accused Price of poor corporate governance and seeking a role that would involve an excessive salary with little accountability.

However, Price said he would observe "good corporate governance" and would hold himself accountable to the board if his leadership bid succeeded.

He also said he wanted a "modest" salary that was incentivised, so that he could cash in if he turned the company around, but make comparatively little if he failed.

Price told ProPrint that Boon had repeatedly offered him a board position during the past seven weeks and had only retracted it on Monday afternoon after Price said he wanted the issue of Paperlinx's future to be settled by shareholders.

"I find the announcement hilarious. How can they be asking me to come on the board at 2pm and put that announcement out at four o'clock and say I'm not a suitable candidate?" he said.

Paperlinx refused to comment when ProPrint asked why it had offered Price a board position if it considered him so flawed. The company also wouldn't say whether it expected Boon to win Friday's vote.

Paperlinx's board said Boon deserved to remain chairman as he had "led significant and rapid change during a period of difficult trading conditions".

It also said he had "the required international and turnaround experience" and that his restructuring plan would save the company $61 million per year and return it to profitability.

Paperlinx reported a $61 million loss in last month's half-yearly report.

Meanwhile, prominent Paperlinx critic Graham Critchley told ProPrint that neither Boon nor Price had answered his questionnaire about strategy and corporate governance.