these were the days.... Have you guys been holding since this...

these were the days.... Have you guys been holding since this ?

Gladiators of IPT wreak mayhem

The only difference between Russell and anyone else in MTIC and the IPT Systems group is that he at least got a honeymoon before being dumped. IPT is the corporate world's answer to Gladiator, with mayhem on the board every few days.

The happiest day so far in the life of Russell Miln, the youthful research and development manager for MTIC Corporate, was his wedding day in Perth on March 24. He married his girlfriend, Kendra, with his close colleague Adrian Floate serving as one of the groomsmen.

Russell whisked the lovely Kendra away to Tahiti for a blissful honeymoon of just one week, then returned to the company in Perth on April 4. Two days later, Adrian removed Russell from his job and shunted him out to the boondocks of Balcatta.

The only difference between Russell and anyone else in MTIC and the IPT Systems group is that he at least got a honeymoon before being dumped. IPT is the corporate world's answer to Gladiator, with mayhem on the board every few days.

It all started out like a fairytale. Three bright young chaps named Russell Miln, Adrian Floate and Andrew Mann had a company called MTIC, which reckons it has developed a method of making secure payments over the internet. Looking around for a listed company last year, they backed 80 per cent of MTIC into Nexus Minerals, run by mining veteran Roger Nikolaenko. Nexus was renamed IPT Systems and in a series of share and option issues raised the creditable sum of $12 million to develop the payments system.

Since last June, the main activity of the directors has been trying to sack each other. Roger, who controls more than a quarter of IPT's issued capital, was unhappy because he thought the payments system was taking too long to develop and MTIC was draining cash out of IPT without being accountable.

The MTIC boys, whose escrowed vendor stock is about equal to Roger's block, were unhappy with Roger because IPT spent $2 million buying Plato Mining from him and because IPT had signed a management agreement for $300,000 a year-plus with Roger's private company, Quadrant.

The independent directors, who have at times included Patrick Lyons, Peter Thomas, Richard Young, Ronald Moir and Jeremy Thew, started in the middle of these fights but have gradually aligned themselves with factions. The result has been a feud of Sicilian proportions.

The blood started flowing last November when Roger blocked acceptance of MTIC's budgets. As MTIC was unfunded, the IPT board appointed administrators to it.

A few days later, Adrian was dumped as managing director and IPT started a discovery action against the vendors of IPT ``following the board of IPT's unsuccessful attempts to discover substantive documentation that would support representations made by the vendors during the period when IPT acquired its interests in MTIC''. Roger took court action in his own name, seeking documentation from the MTIC vendors.

An extraordinary general meeting was called for January 19 at which the MTIC boys tried to sack Roger from the board and he tried to sack them, but a surprise outbreak of peace occurred and the motions were withdrawn. IPT agreed to some funding of MTIC and the administrators were withdrawn.

But it was only a Jerusalem peace because now full-scale war has resumed. On March 22, IPT gave notice of an EGM on April 30 to sack Roger (again). The following day, Peter Thomas, as chairman, issued a status report to shareholders blasting pretty well everyone.

He said IPT had been trying to review MTIC's prospects but ``it was palpably and manifestly apparent ... that meaningful information could not be obtained from MTIC to facilitate the review''.

``There was little merit in pursuing such endeavour very far as conventional corporate and managerial structures, controls, systems and procedures appropriate to a subsidiary of a listed company were more evident by their absence than their presence,'' Peter said.

There was no written shareholders' agreement between IPT and MTIC and Peter was worried about MTIC's capacity to deliver its system.

Peter also dumped the Quadrant management agreement, saying on April 2 that IPT would not make any more payments to Quadrant. He said the ASX believed that the agreement was in breach of listing rules because its terms had not been approved by shareholders.

Despite the harsh words about MTIC, Peter appears to have formed a loose alliance with Adrian and Andrew. The third MTIC boy, Russell, has crossed over and joined the other independent directors, who have a loose alliance with Roger.

When last week began, IPT's board comprised Peter Thomas (chairman), Richard Young, Jeremy Thew, Roger Nikolaenko and Adrian Floate. Richard, Jeremy and Roger had moved that Ronald Moir and Russell Miln should be appointed as directors.

This was not taken well. Ronald, who is special projects manager of MTIC, left the office on Thursday and when he returned that evening the locks had been changed and he couldn't get into his office.

The board meeting was held on Friday at 3pm. Richard, Jeremy and Roger voted Ron and Russell onto the board, despite heavy objections from Adrian and Peter.

The next item on the agenda was a deal under which Roger would tear up the Quadrant management agreement in return for a spin-off of the mineral interests into a vehicle where he would be the largest shareholder. Because of conflicts, everyone had to leave the room except Peter and Richard, who voted for it unanimously.

When all directors were back in the room, Peter declared the meeting closed. Ron wanted it reopened. Peter said: ``I'm chairman. I've closed it.'' Ron said: ``If everyone consents, we can reopen it.'' Adrian, who didn't know what was coming next, said he agreed as long as the meeting didn't last long.

Ron moved a spill of the chairman's position. Peter was removed as chairman and Richard was appointed. So with the Roger crowd in charge again, all the locks were changed back on Saturday night.

The meeting to sack Roger was held at 3pm in Perth on Monday. It lasted less than a minute because Roger had already resigned at 11am. Under IPT's constitution, the appointments of Ron and Russell were required to be ratified at the next company meeting. But as there hadn't been time to alter the notice of meeting, they both had to resign from the board, having been directors for barely a weekend.

Meanwhile, the staff at MTIC were revolting. On Monday, Adrian handed the board 17 notices of resignation, one of which was his own. Then Adrian said his resignation had been delivered by mistake. The board had to take legal advice on whether he had effectively resigned or not.

What Pierpont can't make out is what everyone is fighting over. The mineral interests don't earn a cent and are being spun off.

The vaunted secure payments system technology has yet to earn a cent either. The Datacentre, which is at the core of the system, does not yet seem to be completed. Not one contract has yet been signed to supply the service and, if Pierpont's information is correct, nobody has even bothered to sign a confidentiality agreement yet.

Cash in hand had fallen to $5.7 million last March and was evaporating rapidly. IPT burned through $2.1 million in the last six months of 2000, including more than $1.3 million in the December quarter.

Not all this seems to have been research and development. MTIC reportedly spent $370,000 on the fitout of its Westcentre offices in Hay Street, and another $100,000 was going to be spent on a new administration centre for IPT in Collins Street. Last weekend, the then board of IPT advised contractors that the $100,000 fitout hadn't been approved by the board so it wouldn't be paid for.

Pierpont's current scorecard on IPT/MTIC:

Share issues last year (including option exercises): 14.

Directors removed or resigned in past year: seven.

Directors resigned by mistake: one.

Chairmen removed or resigned: two.

Administrators' and receivers' costs: $300,000.

New office fitouts: $470,000.

Cash when last counted: $5.7 million.

Cash spent in December quarter: $1.3 million.

Cash earned from mining: $0.

Cash earned from IT: $0.

And it hasn't stopped yet. Russell Crowe would feel right at home.