We may have to haul Toll before the courts to gain any insight...

We may have to haul Toll before the courts to gain any insight into this debacle as he has an annoying habit of not explaining his actions:

FMG backs chair despite sale

19th September 2006, 8:45 WST Fortescue Metals Group denied yesterday there was any uncertainty over chairman Gordon Toll’s future with the company, despite the sale of his entire stake in the Pilbara iron ore hopeful for $6.3 million last week. Mr Toll joined Fortescue from Robert Friedland’s Ivanhoe Mines early last year and held 750,000 shares in the group through a 50 per cent stake in his private family investment company Coffee House Group.

Coffee House Group last week dumped the entire stake for $6.3 million, or an average of $8.41 a share.

Mr Toll could not be reached for comment yesterday and is yet to give any public explanation for the sale.

But Fortescue operations director Graeme Rowley rejected speculation that Mr Toll’s tenure on the board was under threat.

“There’s no question about his position as chairman at this stage at all,” Mr Rowley said.

However, Mr Rowley said he was still none the wiser about the reasons for the sale and confirmed that Fortescue was not given any warning of the sale and was only made aware of the issue when Coffee House began selling the stock.

“It was a personal decision — the company in which he has an interest determined to make that sale at that time for reasons that Gordon Toll is the only person who can really clarify,” he said.

But Mr Rowley added that none of the shares had been issued to Mr Toll by Fortescue and all had been acquired by Coffee House, which was previously known as Arran Ventures, long before he joined the company.

He also insisted that Fortescue was not expecting any other directors or executives to start selling stock.

Though Fortescue shares have doubled from levels around $4.50 since last October, the stock has weakened significantly since touching a record $11 in July and yesterday closed 30¢ up at $8.40.

“There are no other executives on the team who are in any way shape or form looking at their current shareholdings and thinking of getting out of those shares at this stage,” Mr Rowley said. Fortescue yesterday preferred to focus on achieving another milestone in its bid to develop its $3.7 billion Pilbara iron ore venture by 2008, lodging an order for 15 locomotives with General Electric.

Mr Rowley said the locomotives would be delivered and ready for commissioning by November next year and would be sufficient to haul all 45 million tonnes of planned annual production.

The next contract to be awarded would most likely be for the supply of ore wagons, he said.


John Phaceas