Lew hangs on at Coles Myer

Sources last night said a majority of the board - eight of the 10 directors - yesterday indicated they firmly opposed Mr Lew's continued tenure.

In informal discussions, eight of the directors also indicated they would support Rick Allert's succeeding Stan Wallis as chairman. Two directors abstained - Mr Allert, and Mr Lew, who sources said argued that he believed the board, in the present situation, should be led by someone ``independent".

Mr Allert has previously indicated that he would accept the chairman's role, but it is understood he would do so only if Mr Lew agreed to quit the board.

In a statement issued just after 7pm, while the board was still at the retailer's headquarters, the chairman, Mr Wallis, said directors would meet again on October 10, when they were expected to decide on a new chairman.

Mr Wallis will retire from the board at the close of the annual meeting on November 20, giving rise to a board vacancy.

Sources said Mr Lew gave a long and passionate speech about why he should remain.

If Mr Lew wants to secure his position, he is free to buy shares in the retailer from today, after the company releases its earnings figures for the year to July 31. Interests associated with Mr Lew's family control more than 50 per cent of Premier Investments, which in turn owns just under 5 per cent of Coles Myer.

In a broadly firmer sharemarket, and perhaps in anticipation of a buying spree, investors yesterday pushed Coles Myer shares 10c higher to $6.10 as more than 3.2 million shares changed hands.

Chief executive John Fletcher has indicated Coles Myer's reported earnings after tax will be just above $350 million, but several analysts believe, after making their own adjustments to normalise earnings, the figure will be closer to $345 million.

Mr Fletcher this morning will lead the Coles Myer divisional managers - Alan Williams, Hani Zayadi, Larry Davis and Dawn Robertson - in a two-hour presentation for analysts.

Mr Wallis's nine-sentence statement gave away little information, simply spelling out how the retailer is meant to determine which directors will stand for re-election.

He said the board ``was continuing to address issues relating to the election of directors" this year.

Mr Lew, however, has insisted that he will stand for election despite the lack of board support, and is supported by his ally on the board, Mark Leibler.

In late August, Mr Leibler's name was selected by boardroom ballot as the third non-executive director required to retire. He has disputed the way the ballot was conducted.