Steve Harris, City Pacific defo attack, Rich List and all our recent trades
March 3, 2008
Dear Mayne Report subscribers,
we've got five lively stories in today's edition including a City Pacific defamation attack on Fairfax commentator Michael West, Andrew Michelmore's now withdrawn dirt file attack on Allegiance Mining, the Steve Harris push at WA News, 12 new names for our Rich List and all our recent share trading.
I'm in Sydney tomorrow to address 700 internal auditors at Darling Harbour but will also be on 702 ABC Sydney with Deborah Cameron from 9.15am if you get a chance to tune in.
Do ya best, Stephen Mayne
we've got five lively stories in today's edition including a City Pacific defamation attack on Fairfax commentator Michael West, Andrew Michelmore's now withdrawn dirt file attack on Allegiance Mining, the Steve Harris push at WA News, 12 new names for our Rich List and all our recent share trading.
I'm in Sydney tomorrow to address 700 internal auditors at Darling Harbour but will also be on 702 ABC Sydney with Deborah Cameron from 9.15am if you get a chance to tune in.
Do ya best, Stephen Mayne
Defamation threats often a sign of corporate trouble
As someone who has been sued for defamation three times and lost our house after a battle with radio shock jock Steve Price, I take a close interest in Australia's defamation laws and track who has used them over the years.
Therefore, it was most disappointing to receive a letter from colourful Gold Coast company City Pacific today which included the following:
Journalist Michael West is the author of a number of articles which have appeared in various newspapers over several months, the most recent this morning. These articles relating to City Pacific's well being are in our considered view, at times, misleading and unfounded.
Despite repeated offers Mr West has consistently declined to interview members of City Pacific's executive team and has more recently declined requests by City Pacific to meet with him claiming he is "not in the business of writing herograms".
Mr West's articles and certain emotive comments made directly to our investors and doccumented by our legal team are causing City Pacific, our investors and shareholders damage.
City Pacific will today instruct its legal advisors with a view to commence legal proceedings against Michael West and those publications that carry his commentary.
Fairfax seems to have blinked because none of Michael West's recent City Pacific stories come up when you do a Google search.
The list of corporates types who've sued for defamation over the years is long and colourful. We've published the full version here which includes luminaries such as Larry Adler, Alan Bond, Laurie Connell, Joe Gutnick, John Elliott and Brian Quinn.
City Pacific shares plunged 53c to a five year low of $1.92 today - a fitting 21% plunge on the day it advised shareholders that its credit crisis strategy included "shooting the messenger". Today's tumble was caused by this Scott Rochford story in The SMH today about restated accounts revealing that current liabilities were understated by $30 million in the latest accounts.
City Pacific lodged its revised half year profit statement at 6.45pm on Friday night. That was six hours after this statement about its controversial $1.1 billion mortgage fund which is now being called in at a rapid rate after being "deconsolidated" from the accounts.
Attempting to call in $1 billion of debt in a year is no mean feat and it will cause a huge squeeze for all those developers out there who have City Pacific loans at high interest rates. We already know that $94 million is in arrears.
Aggressive City Pacific CEO and 19% shareholder Phil Sullivan should stop wasting shareholder funds on defamation action and focus on getting his accounts right, debt down and his share price back up.
You never hear from the non-executive directors at City Pacific. Shane Stone, you're a former Liberal Party president who sits on this board. Get involved, son.
Therefore, it was most disappointing to receive a letter from colourful Gold Coast company City Pacific today which included the following:
Journalist Michael West is the author of a number of articles which have appeared in various newspapers over several months, the most recent this morning. These articles relating to City Pacific's well being are in our considered view, at times, misleading and unfounded.
Despite repeated offers Mr West has consistently declined to interview members of City Pacific's executive team and has more recently declined requests by City Pacific to meet with him claiming he is "not in the business of writing herograms".
Mr West's articles and certain emotive comments made directly to our investors and doccumented by our legal team are causing City Pacific, our investors and shareholders damage.
City Pacific will today instruct its legal advisors with a view to commence legal proceedings against Michael West and those publications that carry his commentary.
Fairfax seems to have blinked because none of Michael West's recent City Pacific stories come up when you do a Google search.
The list of corporates types who've sued for defamation over the years is long and colourful. We've published the full version here which includes luminaries such as Larry Adler, Alan Bond, Laurie Connell, Joe Gutnick, John Elliott and Brian Quinn.
City Pacific shares plunged 53c to a five year low of $1.92 today - a fitting 21% plunge on the day it advised shareholders that its credit crisis strategy included "shooting the messenger". Today's tumble was caused by this Scott Rochford story in The SMH today about restated accounts revealing that current liabilities were understated by $30 million in the latest accounts.
City Pacific lodged its revised half year profit statement at 6.45pm on Friday night. That was six hours after this statement about its controversial $1.1 billion mortgage fund which is now being called in at a rapid rate after being "deconsolidated" from the accounts.
Attempting to call in $1 billion of debt in a year is no mean feat and it will cause a huge squeeze for all those developers out there who have City Pacific loans at high interest rates. We already know that $94 million is in arrears.
Aggressive City Pacific CEO and 19% shareholder Phil Sullivan should stop wasting shareholder funds on defamation action and focus on getting his accounts right, debt down and his share price back up.
You never hear from the non-executive directors at City Pacific. Shane Stone, you're a former Liberal Party president who sits on this board. Get involved, son.
Zinifex grovels to Allegiance Mining board
The agreed takeover deal between predator Zinifex and prey Allegiance Mining seems to have included a very unusual clause. The bulging mail bag today included the following unsigned letter to Allegiance Mining shareholders from Zinifex:
Dear shareholder
Withdrawal and Clarification of Statements
Zinifex Limited wishes to formally withdraw and clarify statements reported in The Australian on Tuesday 26 February 2008 in relation ot Allegiance Mining NL.
Zinifex has nothing but high regard for the Board and Management of Allegiance for what they have created at Avebruy. Any inference in the artile of anything untoward is totally unfounded and unintended. Mr Michelmore has today written to Allegiance to personally apologise to Mr Tony Howland-Rose and the Board for any reputation damage that might have occurred from the comments reported in The Australian.
As a point of clarification, the reference to information in the possession of Zinifex was to operational matters related to progress of Avebury commissioning. None of these matters were material to the price of Allegiance shares. These concerns were satisfactorily addressed in the discussions which lead to the increased offer.
The Australian has explained the background of all this in an article in today's paper. It is quite a slap in the face for Zinifex CEO Andrew Michelmore, who has today been crowned the CEO of the combined Oxiana-Zinifex-Allegiance mining house.
Dear shareholder
Withdrawal and Clarification of Statements
Zinifex Limited wishes to formally withdraw and clarify statements reported in The Australian on Tuesday 26 February 2008 in relation ot Allegiance Mining NL.
Zinifex has nothing but high regard for the Board and Management of Allegiance for what they have created at Avebruy. Any inference in the artile of anything untoward is totally unfounded and unintended. Mr Michelmore has today written to Allegiance to personally apologise to Mr Tony Howland-Rose and the Board for any reputation damage that might have occurred from the comments reported in The Australian.
As a point of clarification, the reference to information in the possession of Zinifex was to operational matters related to progress of Avebury commissioning. None of these matters were material to the price of Allegiance shares. These concerns were satisfactorily addressed in the discussions which lead to the increased offer.
The Australian has explained the background of all this in an article in today's paper. It is quite a slap in the face for Zinifex CEO Andrew Michelmore, who has today been crowned the CEO of the combined Oxiana-Zinifex-Allegiance mining house.
Harris is the man for WA News
It would have been fairly obvious who I was referring to in Friday's update about the WA News board candidate to anyone who had read the following mention of Steve Harris in last Wednesday's edition:
An even better candidate would be someone like Steve Harris, the former editor-in-chief of the Herald Sun and chief executive of The Age who recently departed as CEO of the Melbourne Football Club. I'm trying to track him down but the WAN has set a ridiculous deadline of this Friday, presumably to limit the number of outside candidates.
The good news is that Harris has formally put his hand up. The Australian mentioned his name along with two other outside candidates on Saturday and followed up with this piece today, whilst the Herald Sun had the following on Saturday. This line from The Weekend Australia is correct: "Mr Harris is believed to have been lobbied to stand by shareholder activist Stephen Mayne, who has been a vocal critic of the board's performance in recent months."
However, it is important to remember that Harris is completely his own man and shouldn't be tarred by any association with me. He did hire me back to the Herald Sun in 1994, but that was the first time we'd met and before last Friday, we hadn't communicated for more than six years.
Harris has also said nothing to me about his views of WA News or any career plans after finishing as Melbourne Football Club CEO later this month. However, the timing is perfect and whoever sits on the next WA News board would also potentially have a future CEO in their midst - although it is unknown if Harris would move to Perth if the decision was taken to remove the incumbent, Ken Steinke.
Finally, it is worth remember just how hard it is to find non-executive directors with newspaper experience in Australia. This is what then Fairfax chairman Brian Powers said in 1999 when I asked why the company still had no directors with newspaper experience:
On the Board, about expanding the Board to include someone with newspaper experience, I said that was ideal and we spoke candidly when we hired Mr Hilmer, ideally someone's going to have thirty years of newspaper experience and also going to have all the skills that Mr Hilmer brings to the table. It was impossible to find that for the chief executive, and I think we made a very good choice there. Again, to find someone who's got senior business experience on the newspaper side and is not affiliated with one of our competitors, is very, very hard to do. Ideally we would have someone who's a really experienced newspaper person sitting on the Board as a non-exec, we don't have that. We've looked in Australia and haven't been able to find one. A Melbourne director, I hope we will in the next three months put a Melbourne director on the Board.
The great irony here is that Harris would make a perfect Fairfax Media director. If Fairfax chairman Ron Walker had any sense, he would ring Harris and attempt to recruit him for Fairfax before the WAN nominations deadline this Friday.
An even better candidate would be someone like Steve Harris, the former editor-in-chief of the Herald Sun and chief executive of The Age who recently departed as CEO of the Melbourne Football Club. I'm trying to track him down but the WAN has set a ridiculous deadline of this Friday, presumably to limit the number of outside candidates.
The good news is that Harris has formally put his hand up. The Australian mentioned his name along with two other outside candidates on Saturday and followed up with this piece today, whilst the Herald Sun had the following on Saturday. This line from The Weekend Australia is correct: "Mr Harris is believed to have been lobbied to stand by shareholder activist Stephen Mayne, who has been a vocal critic of the board's performance in recent months."
However, it is important to remember that Harris is completely his own man and shouldn't be tarred by any association with me. He did hire me back to the Herald Sun in 1994, but that was the first time we'd met and before last Friday, we hadn't communicated for more than six years.
Harris has also said nothing to me about his views of WA News or any career plans after finishing as Melbourne Football Club CEO later this month. However, the timing is perfect and whoever sits on the next WA News board would also potentially have a future CEO in their midst - although it is unknown if Harris would move to Perth if the decision was taken to remove the incumbent, Ken Steinke.
Finally, it is worth remember just how hard it is to find non-executive directors with newspaper experience in Australia. This is what then Fairfax chairman Brian Powers said in 1999 when I asked why the company still had no directors with newspaper experience:
On the Board, about expanding the Board to include someone with newspaper experience, I said that was ideal and we spoke candidly when we hired Mr Hilmer, ideally someone's going to have thirty years of newspaper experience and also going to have all the skills that Mr Hilmer brings to the table. It was impossible to find that for the chief executive, and I think we made a very good choice there. Again, to find someone who's got senior business experience on the newspaper side and is not affiliated with one of our competitors, is very, very hard to do. Ideally we would have someone who's a really experienced newspaper person sitting on the Board as a non-exec, we don't have that. We've looked in Australia and haven't been able to find one. A Melbourne director, I hope we will in the next three months put a Melbourne director on the Board.
The great irony here is that Harris would make a perfect Fairfax Media director. If Fairfax chairman Ron Walker had any sense, he would ring Harris and attempt to recruit him for Fairfax before the WAN nominations deadline this Friday.
Selling last week, buying today
Alan Kohler has just told his Eureka Report subscribers that he's in liquidiation mode and has moved his super fund to 50% cash. I've got a different view and reckon the market represents reasonable value at around 5500 and today spent $3,200 on the following six stocks:
Aquila Resources: bought 56 at $8.99
Dyno Nobel prefs: bought 6 at $98.
Every Day Mining Services: bought 1352 at 37c
Futuris hybrids: bought 6 at $89
International Wine Investment fund: bought 461 at $1.085
Structural Systems: bought 157 at $3.20.
However, these purchases come after the following sales last week when the All Ords was pushing towards 6000 and starting to look overvalued:
Monday, 25 Feb, 2008
Mundo Minerals: sold 600 shares at 86c. Bought 736 shares at 68c on Jan 18, 2008. Gross profit $120.
Tuesday, 26 Feb, 2008
Nido Petroleum: sold 1,500 shares at 35c. Bought 1725 shares at 29c on Jan 16, 2008. Gross Profit: $90
OM Holdings: sold 200 shares at $2.53. Bought 274 shares at $1.83 on Jan 4, 2008. Gross Profit: $140
News Corp: sold 200 shares at $21.70. Bought 200 shares at $20.73 on Oct 14, 2005. Gross Profit: $194
Giralia: sold 500 shares at $1.14. Bought 715 shares at 70c on Feb 11, 2008. Gross Profit: $220
United Minerals: sold 500 shares at 97c. Bought 625 shares at 80c on Jan 22, 2008. Gross Profit: $85
Wednesday, 27 Feb, 2008
AIM Resources: sold 400 shares at 12c. Bought 5000 shares at 10c on Jan 22, 2008. Gross Profit: $8
Challenger Diversified Property: sold 1,000 shares at 89c. Bought 544 shares at 92c on Jan 7, 2008. Gross loss: $30
Friday, 29 Feb, 2008
Energy World: sold 500 shares at $1.29. Bought 560 shares at 90c on July 27, 2007. Gross Profit: $195
Cape Lambert: sold 1,000 shares at 50c. Bought 1,283 shares at 39c on dec 18, 2007. Gross Profit: $110.
I'm trying to build the world's biggest small share portfolio and stay out of debt. At the moment the 640 stocks are worth just under $200,000 and the margin loan is about $10,000 so we've got a fair bit of wriggle room and no other debts.
If it keeps falling, we'll keep buying. If it goes for a bit of a run like last week, we'll take some profits. Pretty simple really - and very different from Kohler's position which will cause a fair degree of panic amongst his army of followers.
Aquila Resources: bought 56 at $8.99
Dyno Nobel prefs: bought 6 at $98.
Every Day Mining Services: bought 1352 at 37c
Futuris hybrids: bought 6 at $89
International Wine Investment fund: bought 461 at $1.085
Structural Systems: bought 157 at $3.20.
However, these purchases come after the following sales last week when the All Ords was pushing towards 6000 and starting to look overvalued:
Monday, 25 Feb, 2008
Mundo Minerals: sold 600 shares at 86c. Bought 736 shares at 68c on Jan 18, 2008. Gross profit $120.
Tuesday, 26 Feb, 2008
Nido Petroleum: sold 1,500 shares at 35c. Bought 1725 shares at 29c on Jan 16, 2008. Gross Profit: $90
OM Holdings: sold 200 shares at $2.53. Bought 274 shares at $1.83 on Jan 4, 2008. Gross Profit: $140
News Corp: sold 200 shares at $21.70. Bought 200 shares at $20.73 on Oct 14, 2005. Gross Profit: $194
Giralia: sold 500 shares at $1.14. Bought 715 shares at 70c on Feb 11, 2008. Gross Profit: $220
United Minerals: sold 500 shares at 97c. Bought 625 shares at 80c on Jan 22, 2008. Gross Profit: $85
Wednesday, 27 Feb, 2008
AIM Resources: sold 400 shares at 12c. Bought 5000 shares at 10c on Jan 22, 2008. Gross Profit: $8
Challenger Diversified Property: sold 1,000 shares at 89c. Bought 544 shares at 92c on Jan 7, 2008. Gross loss: $30
Friday, 29 Feb, 2008
Energy World: sold 500 shares at $1.29. Bought 560 shares at 90c on July 27, 2007. Gross Profit: $195
Cape Lambert: sold 1,000 shares at 50c. Bought 1,283 shares at 39c on dec 18, 2007. Gross Profit: $110.
I'm trying to build the world's biggest small share portfolio and stay out of debt. At the moment the 640 stocks are worth just under $200,000 and the margin loan is about $10,000 so we've got a fair bit of wriggle room and no other debts.
If it keeps falling, we'll keep buying. If it goes for a bit of a run like last week, we'll take some profits. Pretty simple really - and very different from Kohler's position which will cause a fair degree of panic amongst his army of followers.
Another 12 Mayne Report Rich Listers
The Mayne Report Rich List now has more than 600 names after we trawled through a few old BRW efforts, but here are 12 new names that have never been mentioned before by any Rich List:
Gene Neill: Mount Eliza businessman in Victoria who in February 2008 featured in a Melbourne Magazine story about luxury boats and confessed to having owned 10 over the years, the latest being a $3 million birthday present.
Greg Jones: business partner of John Kinghorn who owned 6.6% of the company and pocketed $45 million from selling 18.2 million Rams shares into last year's disastrous float but his residual 5 million shares are barely worth $1 million.
Nick Thyssen: co-founder of Patra orange juice business in the 1970s who did it all again with Original Juice in the 1990s before selling out for $35 million to Golden Circle in 2002.
Judith Henzell: wealthy Queensland family which is realising a substantial fortune from land holdings on the Sunshine Coast such as Pelican Waters.
Joan Ford: wealthy Queensland family which is realising a substantial fortune from land holdings on the Sunshine Coast such as Pelican Waters.
Rijs Family: the founders of listed company Patties Foods which still own 47% or about $100 million worth of stock and also have three family members on the board.
Geoff Lewis: co-founder and managing director of Perth-based IT out-sourcing company ASG Group. Owns 14.7 million shares and has 3 million options which are together worth more than $20 million.
Stephen Tull: co-founder of Perth-based IT out-sourcing company ASG Group who no longer works for the firm but retains 12.25 million shares or 10% of the company worth more than $15 million.
Dr Ian Bennett: makes the Beach Petroleum top 20 list with 6.88 million shares worth more than $10 million.
Philip Parker: real estate agent and founding director of Queensland developer FKP. Now a non-executive director but retains 12.7 million shares or 5% of the company which is worth more than $50 million.
Rodney Forrester: managing director of Queensland developer FKP from 1987 until 2003. Remains a non-executive director and owns 5.8 million shares worth more than $20 million.
Frank Wilson: taxation lawyer who became founding chairman and controlling shareholder of Perth-based TFS Corporation which is into forestry and fragrances. Owns 39 million shares worth about $40 million.
Greg Jones: business partner of John Kinghorn who owned 6.6% of the company and pocketed $45 million from selling 18.2 million Rams shares into last year's disastrous float but his residual 5 million shares are barely worth $1 million.
Nick Thyssen: co-founder of Patra orange juice business in the 1970s who did it all again with Original Juice in the 1990s before selling out for $35 million to Golden Circle in 2002.
Judith Henzell: wealthy Queensland family which is realising a substantial fortune from land holdings on the Sunshine Coast such as Pelican Waters.
Joan Ford: wealthy Queensland family which is realising a substantial fortune from land holdings on the Sunshine Coast such as Pelican Waters.
Rijs Family: the founders of listed company Patties Foods which still own 47% or about $100 million worth of stock and also have three family members on the board.
Geoff Lewis: co-founder and managing director of Perth-based IT out-sourcing company ASG Group. Owns 14.7 million shares and has 3 million options which are together worth more than $20 million.
Stephen Tull: co-founder of Perth-based IT out-sourcing company ASG Group who no longer works for the firm but retains 12.25 million shares or 10% of the company worth more than $15 million.
Dr Ian Bennett: makes the Beach Petroleum top 20 list with 6.88 million shares worth more than $10 million.
Philip Parker: real estate agent and founding director of Queensland developer FKP. Now a non-executive director but retains 12.7 million shares or 5% of the company which is worth more than $50 million.
Rodney Forrester: managing director of Queensland developer FKP from 1987 until 2003. Remains a non-executive director and owns 5.8 million shares worth more than $20 million.
Frank Wilson: taxation lawyer who became founding chairman and controlling shareholder of Perth-based TFS Corporation which is into forestry and fragrances. Owns 39 million shares worth about $40 million.