Under pressure: David Jones chairman Peter Mason.

David Jones chairman Peter Mason. Photo: Rob Homer

The David Jones board and particularly its chairman, Peter Mason, are in a perilous position as major shareholders are considering calling an extraordinary general meeting of shareholders to change the board.

One shareholder who preferred not to be named called the board dysfunctional.

Shareholders were incredibly upset by the fact that the company did not disclose the merger approach from David Jones’ major competitor Myer. They were also furious that the board didn’t pursue the merger and seek better terms from Myer.

In dismissing the offer, ‘they were just trying to protect their position as a board’, said one large investor.

However even before the sensational revelations of the spurned Myer offer several large shareholders had been thinking about pushing for board change at David Jones.

Their belief that the chief executive Paul Zahra had resigned as a result of meddling from directors angered some large shareholders – many of whom have questioned why there is a lack of retail experience from the board.

They had also been vocal about giving permission to two directors to buy shares in the days before the announcement of the company’s quarterly sales figures.

Shareholders were incredulous that the Australian Securities and Investments Commission had this week decided there had been no breach of securities law given directors bought shares after the sales announcement which sent the shares up 15 per cent in three days – and after the board became aware of the merger approach from Myer.

During the end of last year a number of major shareholders including BT, Goldman Sachs and Perpetual sought meetings with Mason to explain what had taken place with Zahra.

They were clearly not satisfied and voting against the David Jones remuneration report at the Annual meeting in November