appointment of director, page-26

The change group will follow proper procedures and seek to persuade the majority of shareholders that Jervois could achieve more and achieve it more quickly under a team that can draw on international mining experience and has the attention and even the respect of not just one, but several large Chinese companies.

This is the fundamental issue. The change group is not focussed on impugning the current MD or his family, although in making its case it cannot avoid the fact that a number of corporate irregularities have occurred and that a number of long standing and large shareholders, as well as a considerable number of smaller shareholders, have expressed a range of opinions unfavourable to the approach taken by the present management.

After all a company which has had 10 rights and entitlement issues in 15 years, plus placements, is an organisation that has been very reliant on the goodwill and support of its shareholders. For some this is starting to wear thin.

This need not be taken as a personal comment on the MD or his staff, but the very fact that four of the five corporate staff of Jervois are members or in-laws of the Pursell family does raise the bar. Such a situation may be supportable in some circumstances but for a public company totally reliant on the contunued goodwill of the market, it puts a particular onus on management to ensure that shareholder returns, or the prospect of returns, are uppermost in the mind of the directors. This apparent conflict of interest would be undesirable at the best of times but as the major economies fall into a recession likely to be deeper than any since the thirties, questions of cash-flow and cost reduction become particularly acute.

Now that the Federal Court has upheld the injunction issued by Justice Finkelstein, an external umpire has made it clear that proper procedures must be followed by the company's officers. While this order covered the limited issue of the decisions purported to be made by two Board meetings prior to Christmas, it serves as a warning shot that the company will be under examination. In the recent hearing Middleton J confined himself to the particular issues before him, but obviously judges read the affadavits and exhibits presented by the parties which cover a range of evidence and make their rulings in that context.

Some postings have suggested that the injunction sought by Leydin and Campbell are part of an attempt by Mr Norman Seckold to "take-over" Jervois indirectly. They may have a point. Mr Pursell controls or seeks to control the company with 1.5% of the shares, so it may be that Mr Seckold can do the same with his 6.2%. That may provide effective daily control, but not uncontestable control as he would still be subject to a similar challenge by independent directors if they felt his actions were not in the best interests of shareholders generally. That means he would need to acquire far more to have assured independence of action.

The simpler and more plausible explanation may be that after hearing that the negotiations with China Rail Resources ended acrimoniously he was disappointed and wishes to reverse that situation if possible. That requires successful execution of a long range plan to bring value to the company's assets. It appears that he believes he can muster a Board that will be more open to diversity of views, may be able to win the support of potential funding partners and will be able to finally finish the protracted search for a robust techical solution. It is certainly the case that he and his associates have had considerable experience in building and managing large and profitable gold and silver operations in Canada and Mexico.

It seems to follow that postings alarmed by the possibility of a take-over are either naive or want to preserve the status quo. More likely Mr Seckold, like most other shareholders, simply wants to ensure than the company survives for better days and sooner or later is recognised for its inherent value.