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Conversion Industries CEO Quits in Wake of Company's Delisting : Securities: The head of the merchant banking firm cites adverse publicity.

October 14, 1994|TOM PETRUNO | TIMES STAFF WRITER

The chief executive of embattled Conversion Industries resigned Thursday, two days after the American Stock Exchange decided to delist the Pasadena-based company's stock over disclosure issues.

John P. McGrain, 49, said in a statement that he decided to leave Conversion because "the adverse publicity I have received as chairman has detracted from shareholder value."

Conversion has operated as a merchant banking firm since 1991, investing in small companies and facilitating public stock offerings for those firms.

But shares of many of those companies, and of Conversion itself, have plummeted in value this year. Financial ties among McGrain, Conversion, its spinoff companies and Colorado brokerage Tamaron Investments have also generated controversy.

In a rare action, the American Stock Exchange said Tuesday that it would delist shares of Conversion and one of its spinoffs, Beta Well Services. The Amex said the firms failed to comply with certain disclosure requirements, which were not specified.

Another Conversion spinoff, Pasadena-based CVD Financial, requested a trading halt in its stock on the Amex on Thursday, after McGrain quit his seat on its board.

Amex trading in Conversion and Beta remain suspended pending hearings the companies have requested with exchange officials.

McGrain said in his statement that he would be available to Conversion as a consultant.

Conversion's board, meanwhile, had no comment on McGrain's resignation or on a potential successor as CEO, but it is expected to make an announcement today.

Conversion stock last traded at $1.38, down from a peak of $33.25 in 1993.

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