I find Peter very good in interviews but the business is pretty opaque without them. This is, as Cameron notes, an unexpected development based off previous communications. It is, of course, fine for leadership to make changes, but it's perhaps less fine following context such as the below, from an interview with Alan Kohler in September last year:AK: Peter, perhaps we’d better start with the announcement on 13th of August about your impairment charge which you then subsequently had an explanation of or a clarification three days later. Tell us what that was about because the share price fell sharply and then since recovered, of course. What happened?
Peter: Yeah, I think we probably didn’t communicate clearly enough that this issue isn’t related to anything to do with Micro-X, or Nano, or any of the programmes that are in our horizon, it’s to do with XinRay who we own 30% of have set up a joint venture manufacturing facility in China which is – I think they’re struggling to get the people and things set up in the way that they wanted to so XinRay had written down in their books the value of the joint venture and geared somewhat with what that would mean for XinRay’s business.
But that’s not great for you, you own 30% of that business, it’s important to you and they’re having trouble.
They’re having trouble in a venture that they set up in China but that wasn’t part of our plan so it doesn’t impact our plans at all. That’s what I made clear in the qualification. It would be good if it was successful but it’s not bad because it’s just running behind schedule and they’ve taken an opportunity to write down the value of that in their books and we’re doing the same. The important thing is that it doesn’t send any message at all about our future confidence and the technology or our future plans.
Before we get onto other matters and your future plans just to finalise the discussion about XinRay systems, the thing that they’re setting up in China, is that to make carbon nanotubes for you?
Not for us, no, it was a joint venture to set up a tube manufacturing facility because something like 90% of the world’s x-ray tubes are made in China because it’s a labour-intensive activity. All of the big players have set up manufacturing facilities in China to make the core x-ray tube, those tubes are then supplied into units which look like they’ve been built in Germany, or Holland, or America, or wherever, but in fact the x-ray tubes are all made in China so XinRay embarked on a similar venture for this carbon nanotube.
You mainly own the 30% of XinRay to protect your IP, correct, because they own it?
That’s correct, yes, and because they’re a strategic technology partner so having a seat on the board and steering their fortunes is good practice to protect a key partnership.
