Opes founder's mortgage, BHP spies, Directors' club, Rich List and hilarious Allco HIT DRP
April 1, 2008
Dear Mayne Report readers,
The Opes Prime collapse is the story that keeps on giving and today we've got the low down on founder Laurie Emini's housing finances.
In other Mayne Report stories, Rio Tinto have issued a firm denial over these extraordinarily provocative questions carried into a BHP focus group recently by a private investigator from Werribee, Mr Eric O'Rourke.
Our coverage of the Directors' Club continues, with questions over the independence of new board members at Minara Resources and Alumina.
And we've also got more names for the burgeoning Mayne Report Rich List and the hilarious tale of the Allco dividend reinvestment plan which more than doubled my shareholding in one HIT, so to speak.
I've been chatting to Lindy Burns on 774 ABC Melbourne at 5.40pm tonight and go here to listen to this morning's chat with Deborah Cameron on 702 ABC Sydney. Opes Prime is front and centre.
There's also a package of videos from the one hour discussion with two other commentators on Sky Business Channel's Business View program on Saturday morning.
Finally, the corporate plod almost put another small time crook in the slammer today. Alas, the Perth financial planner got a wholly suspended sentence. Let's hope the charges from all the dodgy governance over the past six months will start to flow soon.
Click through to read the full edition and keep doing ya best, Stephen Mayne
The Opes Prime collapse is the story that keeps on giving and today we've got the low down on founder Laurie Emini's housing finances.
In other Mayne Report stories, Rio Tinto have issued a firm denial over these extraordinarily provocative questions carried into a BHP focus group recently by a private investigator from Werribee, Mr Eric O'Rourke.
Our coverage of the Directors' Club continues, with questions over the independence of new board members at Minara Resources and Alumina.
And we've also got more names for the burgeoning Mayne Report Rich List and the hilarious tale of the Allco dividend reinvestment plan which more than doubled my shareholding in one HIT, so to speak.
I've been chatting to Lindy Burns on 774 ABC Melbourne at 5.40pm tonight and go here to listen to this morning's chat with Deborah Cameron on 702 ABC Sydney. Opes Prime is front and centre.
There's also a package of videos from the one hour discussion with two other commentators on Sky Business Channel's Business View program on Saturday morning.
Finally, the corporate plod almost put another small time crook in the slammer today. Alas, the Perth financial planner got a wholly suspended sentence. Let's hope the charges from all the dodgy governance over the past six months will start to flow soon.
Click through to read the full edition and keep doing ya best, Stephen Mayne
Opes founder's modest mortgaged Templestowe pad
Alan Kohler has reported this afternoon on Business Spectator that Opes Prime founder Laurie Emini gave a personal guarantee when ANZ extended another $100 million line of credit shortly before Easter.
Unfortunately, that probably won't amount to much because we checked out Laurie's Templestowe pad today and it is nothing special in the context of the suburb's sprawling mansions and 300 private tennis courts. In a falling property market creditors would be lucky to get $1 million.
Besides, a quick visit to the Land Titles office this afternoon revealed that ANZ have had a mortgage over Laurie's place since 1997, back when the lad was retrenched from the bank as part of a de-risking strategy pursued by incoming CEO John McFarlane.
Hmmm, this does not sound like someone with a spare $100 million up their sleave.
There were two big Opes developments today.
Firstly, the ASX unwound a highly contentious series of off-markets crosses down last Friday. After Fairfax's Michael West broke the story last night, I gave it a strong push on 702 ABC Sydney with Deborah Cameron this morning, plus in Crikey this afternoon. Business Spectator has the detail of Tricom's voluntary reversal of the trades after the regulatory attention clearly got too much.
This would suggest that Tricom's problems are about to get a lot worse. Babcock & Brown might need to tip in some more cash to keep it afloat.
The other development was four Opes Prime clients attempting to injunct the sale of their shares by ANZ on the basis that the contract stipulated they were the beneficial owner of the shares despite lending them to Opes. It's a long shot but no surprise, given that many of the 1200 clients seem genuinely surprised by the fine print and the idea that punters have to make good for the bad trades of others just seems so unfair.
Unfortunately, that probably won't amount to much because we checked out Laurie's Templestowe pad today and it is nothing special in the context of the suburb's sprawling mansions and 300 private tennis courts. In a falling property market creditors would be lucky to get $1 million.
Besides, a quick visit to the Land Titles office this afternoon revealed that ANZ have had a mortgage over Laurie's place since 1997, back when the lad was retrenched from the bank as part of a de-risking strategy pursued by incoming CEO John McFarlane.
Hmmm, this does not sound like someone with a spare $100 million up their sleave.
There were two big Opes developments today.
Firstly, the ASX unwound a highly contentious series of off-markets crosses down last Friday. After Fairfax's Michael West broke the story last night, I gave it a strong push on 702 ABC Sydney with Deborah Cameron this morning, plus in Crikey this afternoon. Business Spectator has the detail of Tricom's voluntary reversal of the trades after the regulatory attention clearly got too much.
This would suggest that Tricom's problems are about to get a lot worse. Babcock & Brown might need to tip in some more cash to keep it afloat.
The other development was four Opes Prime clients attempting to injunct the sale of their shares by ANZ on the basis that the contract stipulated they were the beneficial owner of the shares despite lending them to Opes. It's a long shot but no surprise, given that many of the 1200 clients seem genuinely surprised by the fine print and the idea that punters have to make good for the bad trades of others just seems so unfair.
The bizarre mystery of the anti-BHP focus group questions
Today I rang the Werribee private investigator, Eric O'Rourke, who attempted to crash a recent BHP-Billiton focus group session with eight Rio Tinto retail shareholders and he was very coy, saying that he was simply helping out his sister-in-law.
There was also apparently a blonde lady standing out the front of the York Street address attempting to encourage Rio Tinto shareholder to fire off a series of inflammatory questions at their BHP-funded market researchers.
Rio Tinto have formally responded saying "we know nothing of this".
So why would an ordinary Rio Tinto shareholder drag a Werribee private investigator to Sydney armed with an array of highly inflammatory but well researched questions? Eric O'Rourke claims that he thought his sister-in-law was being taken by some bodgy David Tweed-style offer.
So, surely you'd just ignore such an offer? O'Rourke also denied being the author of the questions which were apparently left in a bathroom. All very strange.
Go here for the full list but the following are our favourites:
1. So, if its not your final offer, why don't you stop wasting everyone's time and make your best offer?
2. The market is clearly telling you the price is no-where near enough and you won't succeed. Are you only continuing to try to do this because you'll lose your job if you are seen to give up?
3. How much are you paying your advisers to implement a phony offer?
4. Will you just do a side deal with the Chinese to sell them some (cheap Iron-Ore)/ (part of Australia on the cheap) just so that they accept your offer?
5. How could we trust your people to manage a (combined) business when so many people die in your mines?
6. Can you really survive in Oil and Gas when you are the sixtieth biggest player in the world?
7.Since Marius Kloppers has been in charge, there seems to have been a lot of safety incidents. Has the business lost its focus on safety?
8. Mr Kloppers is paid about 200 times the average weekly earnings in Australia - what does he do for this?
9. When is Don going to retire? Is he going to retire at 70?
There was also apparently a blonde lady standing out the front of the York Street address attempting to encourage Rio Tinto shareholder to fire off a series of inflammatory questions at their BHP-funded market researchers.
Rio Tinto have formally responded saying "we know nothing of this".
So why would an ordinary Rio Tinto shareholder drag a Werribee private investigator to Sydney armed with an array of highly inflammatory but well researched questions? Eric O'Rourke claims that he thought his sister-in-law was being taken by some bodgy David Tweed-style offer.
So, surely you'd just ignore such an offer? O'Rourke also denied being the author of the questions which were apparently left in a bathroom. All very strange.
Go here for the full list but the following are our favourites:
1. So, if its not your final offer, why don't you stop wasting everyone's time and make your best offer?
2. The market is clearly telling you the price is no-where near enough and you won't succeed. Are you only continuing to try to do this because you'll lose your job if you are seen to give up?
3. How much are you paying your advisers to implement a phony offer?
4. Will you just do a side deal with the Chinese to sell them some (cheap Iron-Ore)/ (part of Australia on the cheap) just so that they accept your offer?
5. How could we trust your people to manage a (combined) business when so many people die in your mines?
6. Can you really survive in Oil and Gas when you are the sixtieth biggest player in the world?
7.Since Marius Kloppers has been in charge, there seems to have been a lot of safety incidents. Has the business lost its focus on safety?
8. Mr Kloppers is paid about 200 times the average weekly earnings in Australia - what does he do for this?
9. When is Don going to retire? Is he going to retire at 70?
Possible board conflicts for Coates and Pizzey
The Mayne Report is a strong advocate of attracting our most successful expats back home to join boards, along with Australia country managers for multi-nationals. We need to deepen the gene pool in the Directors' Club and in a globalised world that international perspective is vital.
Former Xstrata Coal CEO Peter Coates last week joined the Santos board which was a good move for all concerned. He would be appropriate replacement for chairman Stephen Gerlach who has been hanging around since 1989, making him one of Australia's longest serving non-executive directors.
However, today Coates has joined the Minara Resources board and all parties appear to be portraying him as an independent. What rubbish. Coates made a fortune working for the secretive Swiss trading house Glencore and its offshoot Xstrata. He can't retire from that experience a multi-millionaire and suddenly be an independent director of Minara Resources when Glencore is the largest shareholder with 53%.
John Pizzey, the newest Alumina director, finds himself in a similar position. The old Ivanhoe Grammar boy rose to be second in charge of Alcoa and chairman of the London Metals Exchange. It was a rewarding career until his retirement in 2003 when he returned home.
Alcoa's current CEO Alain Belda, who was paid a tidy $US25 million in 2007, was Pizzey's old boss. Now they'll be sitting on opposite sides of the table in the AWAC joint venture.
You can argue the toss on this one based on the passage of time, but boards need to be very confident they don't have someone sitting around the table who might be closely aligned or affiliated with a major counter-party.
Former Xstrata Coal CEO Peter Coates last week joined the Santos board which was a good move for all concerned. He would be appropriate replacement for chairman Stephen Gerlach who has been hanging around since 1989, making him one of Australia's longest serving non-executive directors.
However, today Coates has joined the Minara Resources board and all parties appear to be portraying him as an independent. What rubbish. Coates made a fortune working for the secretive Swiss trading house Glencore and its offshoot Xstrata. He can't retire from that experience a multi-millionaire and suddenly be an independent director of Minara Resources when Glencore is the largest shareholder with 53%.
John Pizzey, the newest Alumina director, finds himself in a similar position. The old Ivanhoe Grammar boy rose to be second in charge of Alcoa and chairman of the London Metals Exchange. It was a rewarding career until his retirement in 2003 when he returned home.
Alcoa's current CEO Alain Belda, who was paid a tidy $US25 million in 2007, was Pizzey's old boss. Now they'll be sitting on opposite sides of the table in the AWAC joint venture.
You can argue the toss on this one based on the passage of time, but boards need to be very confident they don't have someone sitting around the table who might be closely aligned or affiliated with a major counter-party.
From the mailbag - Bendigo Bank and Allco HIT's amazing DRP
When you own shares in 650 companies and have added almost 200 stocks so far this year, the daily mail bag gets increasingly big. The most exciting news in the mailbag today was the share purchase plan from Bendigo Bank. All those nasty short-sellers that Robert Gottliebsen continues to rail against sent the stock tumbling such that we're being offered a chance to invest $3000 at $9.60, when it has now recovered to $11.77, suggesting a quick paper profit of more than $600.
This mailbag video last week got stuck into companies which still send dividend cheques without a direct debit form. The problem only seems to be getting worse as the following companies committed that same offence today:
Symbion $6.00
Santos $2.00
Wattyl $7.00
Whilst the Allco empire continues to implode, you've got to laugh about how generous the dividend reinvestment plan at Allco HIT has become. The company declared a 6.7c interim dividend but the stock is trading at just 6c.
Based on a payout of $15.21, this delivered me 242 new shares, more than the 227 that I stupidly bought last year. Clearly the market doesn't think there will ever be another dividend but it is just bizarre that a company with huge solvency problems can still pay any sort of dividend.
This mailbag video last week got stuck into companies which still send dividend cheques without a direct debit form. The problem only seems to be getting worse as the following companies committed that same offence today:
Symbion $6.00
Santos $2.00
Wattyl $7.00
Whilst the Allco empire continues to implode, you've got to laugh about how generous the dividend reinvestment plan at Allco HIT has become. The company declared a 6.7c interim dividend but the stock is trading at just 6c.
Based on a payout of $15.21, this delivered me 242 new shares, more than the 227 that I stupidly bought last year. Clearly the market doesn't think there will ever be another dividend but it is just bizarre that a company with huge solvency problems can still pay any sort of dividend.
Another 5 new Rich Listers
The new names continue to pile up on the Mayne Report Rich List which is now approaching 900 names. Here are another five:
Stewart Gull: the former Carlton footballer started developing regional Victorian retirement villages in 1992 and will continue to operate and develop the villages under the Country Club Villages brand if a planned float proceeds. He might also be the Gull that is attempting to injunct ANZ's liquidation of the Opes Prime portfolio.
David Mariner: was responsible for the re-development of the historic Regent Theatre in Melbourne. This property developer has a diverse property portfolio with The Mariner Group.
George Mirabella: part of the Mirabella Lighting empire, whose father Paul started it all in the 1950s.
Jim Selkirk: Selkirk Bricks, Victoria's largest brick manufacturer, has been running for 123 years.
Christine Santic: the estranged wife of Tony Santic - tuna king and owner of record breaking Melbourne Cup winner Makybe Diva, has just reportedly secured an Australian record separation payout of $125 million.
Check out all the Mayne Report business lists here.
David Mariner: was responsible for the re-development of the historic Regent Theatre in Melbourne. This property developer has a diverse property portfolio with The Mariner Group.
George Mirabella: part of the Mirabella Lighting empire, whose father Paul started it all in the 1950s.
Jim Selkirk: Selkirk Bricks, Victoria's largest brick manufacturer, has been running for 123 years.
Christine Santic: the estranged wife of Tony Santic - tuna king and owner of record breaking Melbourne Cup winner Makybe Diva, has just reportedly secured an Australian record separation payout of $125 million.
Check out all the Mayne Report business lists here.