The Frank Lowy inquisition of 2000
By Cathryn Jimenez
January 17, 2008
We can't find any record of our own account, so this is what The Australian published after the Westfield Holdings AGM on November 9, 2000.
Frank Lowy may have been hoping to cruise through Westfield's 40th annual meeting in Sydney yesterday on the back of its strong performance but what he got instead was nothing short of an inquisition.
For more than an hour, Mr Lowy was grilled on a number of issues ranging from his $8.4 million package, to the Ken Hooper affair and a new development at Bondi Junction in Sydney's east.
But the most sensitive line of questioning related to a perceived conflict of interest between the company and the Westfield Trust.
Shareholder activist Stephen Mayne argued that since 1990 the Westfield Holdings share price had increased 25-fold but that in the same time the Westfield Trust unit price had not even doubled.
He asked what was underpinning the company's performance. In the six months to June 30, it is estimated that the trust paid Westfield Holdings almost $280 million in construction costs and for other services.
"What you have got here is the upstreaming of the benefit from the Westfield business model,'' Mr Mayne said. "The trust needs its own independent directors; you can't have the same group of directors writing their own contracts. I think there is an ethical debate here.''
Clearly frustrated, chairman Mr Lowy responded: "You write a very good fiction story.''
Mr Mayne asked how protected was Westfield Holdings if the trust looked to an alternative management. Mr Lowy said: "The only protection a company has is its performance – we have to rely on that.''
Mr Lowy was also pressed on the Ken Hooper affair and was asked if Westfield was sued over it, who would be exposed – Westfield Holdings or the Westfield Trust.
It was revealed last year that Westfield had funded political consultant Ken Hooper to oppose a $250 million multi-use development near Westfield's new Burwood shopping centre in Sydney's west, under the guise of the bogus action group.
Mr Lowy did ignore one question: Was Mr Hooper being used by Westfield to stymie Woolworths developments at Five Dock and Granville in Sydney's west?
Shareholders also took the company to task over its commitment to the social environment, alleging a lack of it in the Bondi Junction development.
Mr Lowy said full-year profit would probably beat the $148.3 million it posted in fiscal 2000. He said its UK expansion was as significant as its entry into the US in 1977. "We have an excellent platform for expansion in the UK and also, in the future, into Europe.''
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