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Peter Garrett asks if Gunns has misled ASX -

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Peter Garrett asks if Gunns has misled ASX

The World Today - Friday, 30 January , 2009 12:26:00

Reporter: Felicity Ogilvie

ELIZABETH JACKSON: The Federal Environment Minister says the Tasmanian timber company Gunns appears
to have misled the stock exchange about the approval of its pulp mill.

Peter Garrett says Gunns' statement to the market suggests environmental approval has been given to
Gunns to run the mill.

But the Minister says he is yet to give the go-ahead.

Gunns says its statement hasn't misled anyone.

Felicity Ogilvie reports from Hobart.

FELICITY OGILVIE: Before Gunns can run Australia's biggest pulp mill the company needs three
environmental modules to be approved by the Federal Environment Minister.

The unapproved modules L, M and N set down the guidelines for the effluent that will be pumped from
the mill into Bass Strait.

Yesterday Gunns issued a statement to the stock exchange that reads: "The Board believes the mill
will operate within the effluent trigger levels approved by the Federal Environment Minister in
Module L."

But the Federal Environment Minister Peter Garrett has told Hobart ABC local radio he hasn't
approved Module L.

PETER GARRETT: My concern about the statement that Gunns put out went to the fact that it is
potentially misleading and it seems to suggest that in fact I have given an approval under Module L
when in fact I haven't.

FELICITY OGILVIE: Gunns' sustainability manager Calton Frame says the company hasn't misled the
market.

CALTON FRAME: I'll be quite clear about the fact that the Minister hasn't approved Module L and we
are not looking to mislead anyone in the manner of saying that he has.

What we have said is that the trigger levels have been approved and the Minister has certainly
indicated to us that he is satisfied with the trigger levels which are a component of Module L. And
his letter to us from the 5th January did make that clear and we simply reiterated that yesterday.

FELICITY OGILVIE: Has the press release to the stock exchange been written in a way that will make
investors read it and think that the Federal Minister has approved Module L?

CALTON FRAME: No, we don't believe so. What we are simply saying is that we are very comfortable
that the technology of the mill is going to ensure that we satisfy all requirements and approval
requirements of the State and Federal Government into the future.

FELICITY OGILVIE: But is Gunns misleading its potential financiers by giving the impression that
Module L has been approved?

CALTON FRAME: Certainly not. We are not stating that Module L has been approved. We are simply
stating that the information contained within Module L which the Minister has indicated he is
satisfied with leads to us being very confident that the technology employed in the mill is going
to meet all of the necessary requirements in the future approval of that module.

FELICITY OGILVIE: Janet Austin from the Australian School of Business says there are serious legal
consequences for any company that misleads the market.

JANET AUSTIN: Companies are required under both the listing rules and corporate legislation to
advise the market of any information that may materially affect their share price. If they fail, if
the information they provide is misleading in any way, they risk being either ASIC taking action
against them, they can take infringement notice action against them or more serious action against
them.

They also risk the possibility that if shareholders lose money as a result of not being informed of
the right information, that the shareholders may also take action against them.

FELICITY OGILVIE: A spokesman from the Australian Stock Exchange says Gunns' statement to the
market will be scrutinised.

ELIZABETH JACKSON: Felicity Ogilvie with that report.