BIG investors have won their battle to get Gunns chairman John Gay to quit.
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Mr Gay yesterday announced he would immediately retire from the board of the timber company as well as Southern Star Corporation, the venture he set up to oversee the proposed Tamar Valley pulp mill.
He will be replaced as chairman by board member Chris Newman.
Another board member last night denied that Mr Gay _ the public face of the pulp mill and a favourite target of the conservation movement _ had been forced to leave the company he had managed since 1982.
Two of Gunns' top investors _ at least one of which was behind a push to oust Mr Gay _ were yesterday revealed as the substantial shareholders who on Tuesday dumped a massive amount of shares in the Launceston company, causing the stock to plummet to 26.5 cents.
Perpetual Ltd and IOOF Holdings yesterday told the Australian Securities Exchange they had on Tuesday offloaded 14.7 million and 10.3 million shares respectively, at prices as low as 25 cents.
Both major fund managers had been selling large volumes of Gunns shares since last week.
Perpetual and IOOF now hold 11.67 per cent and 8.1 per cent stakes in the company respectively.
Financial analyst Tony Gray said the companies had flexed their muscles and forced the board to act.
"It seems more than a coincidence that two major shareholders sold a material amount of shares on the same day and this clearly forced the hand of the board,'' Mr Gray said.
Gunns board member David Simmons, who will now take over as deputy chairman, denied the board had forced Mr Gay to sever his ties to the company.
"He left on good terms,'' Mr Simmons said.
But he acknowledged that there had been "a lot of investor dissatisfaction'' surrounding Mr Gay's appointment to Southern Star.
"We have to listen to the major shareholders and the market,'' he said.
"There was a perception in the market that John in that (Southern Star) role was really inappropriate and that nothing had changed _ people formed conclusions.''
Mr Gray said today's trading would identify whether Mr Gay's connection to the company had sparked the price fall.
Gunns shares closed at 27.5 cents yesterday.
The Examiner revealed in March that interstate investors were pressuring Mr Gay to stand down from the Gunns board after the company announced a 98 per cent drop in first-half profit.
"These people said it would be better for the company if there were no Tasmanians on the board, but if I go the (pulp) mill, the Launceston head office and our interests would go with me,'' Mr Gay said at the time.
"It's the green movement behind this. Their message is 'you put out John Gay and the pulp mill would not be built'.''
Former Gunns director Robin Gray, who resigned earlier this month after similar investor pressure, yesterday joined a number of high-profile Tasmanians to commend Mr Gay on his contribution to the state. "I think he's been very unfairly
judged,'' Mr Gray said.
Chris Newman, who has been a director of Gunns since 2001, will replace Mr Gay as chairman of Gunns and Southern Star.
Mr Simmons said Gunns's headquarters would remain in Launceston.
