GUNNS chairman John Gay finally capitulated to shareholders last night, quitting all posts and raising deep doubts that his company's controversial Tasmanian pulp mill will be built.
Mr Gay failed in his attempt to fend off investor pressure by shifting into a Gunns subsidiary, Southern Star, to run the mill project. He resigned from it, as well as the main Gunns board, which he had previously promised to leave by November.
Mr Gay had been resisting pressure for months but the final act came this week when major institutional investors sold off large parcels of Gunns shares and its price spiralled down from 38¢ to a low of 26¢.
The shares closed yesterday at 27.5¢ before the announcement was made.
The new chairman of Gunns and Southern Star is Melbourne businessman Chris Newman, whose other directorships include Austereo and Webjet. His deputy will be former Hills Industries managing director David Simmons.
Tributes to Mr Gay flooded in last night from industry and government in Tasmania.
Tasmanian Premier David Bartlett said Mr Gay had turned a small Launceston sawmilling and hardware business into a big national company during his 37-year career.
"The state government will continue to work with Gunns's new leadership team, to help it realise the pulp mill project,'' Mr Bartlett said.
But Greens senator Christine Milne said that the forced departure of Mr Gay showed that Gunns's institutional investors now held a different view of the company's future.
''Their priority will be to save it from near bankruptcy and get it back on track,'' Senator Milne said.
The Wilderness Society's pulp mill campaigner, Paul Oosting, said the project had been personally driven by Mr Gay.
''I think there is a very strong expectation they will look at other options,'' Mr Oosting said.
