Perpetual chairman Bob Savage defended his company’s status as the biggest shareholder in pulp mill proponent Gunns Ltd at the AGM on Tuesday by claiming that his customers weren’t at all worried about the controversial investment.

Alas, this was before there was wide public recognition of the fact that Perpetual chooses to have a bigger percentage exposure to Gunns than any other company in the ASX300.

A Perpetual investor, Stephen Heydt, has informed Crikey that he sent the following email to the company:

To: investments@perpetual.com.au; media@perpetual.com.au

I am an investor with a super fund ($300k) managed by Perpetual. I have just learned of your companies investment in Gunns, from a report of your AGM in The SMH today.

I am presently overseas but on my return in two weeks, my priority will be to reinvest my funds elsewhere. While you manage only a relatively small investment on my behalf, I had been anticipating increasing it substantially with a SMF presently invested overseas.

As I find such investments untenable you leave me and no doubt many others who have similar convictions no choice.

Stephen Heydt

Rather than backing down from Gunns as the debate over the pulp mill raged, Perpetual actually bought another 10 million shares on September 5, but didn’t announce this for more than a month.

Maybe this shouldn’t come as a surprise. We all know that John Howard is a huge fan of Gunns and it turns out that his former Cabinet Secretary, Paul McClintock, is chairman of Perpetual’s board investment committee.

I asked McClintock at the AGM whether it was his decision to plough another $30 million into Gunns shortly before the Howard Government approved the pulp mill – a move which sent Gunns shares soaring.

Alas, chairman Savage wasn’t going to go anywhere near a potential controversy such as “Howard mate backs Gunns” and stressed the decision to become even more loaded with Gunns shares was made by fund managers. He said the investment committee would probably not have even known about the move before it happened.

We’ve put together a hard-hitting video on the Perpetual AGM, including bootleg audio that was strictly banned by overbearing security guards. The tape they confiscated was the wrong one and we hope they enjoyed the piano concertos.