Cossie's book, WA News, old chairs, ASX conflicts, Rich List and full share disclosure
February 2, 2010
Dear Mayne Reporters,
A tolerance of conflict of interest crops up all too frequently in Australian business, political and media life and unfortunately we're seeing it once again with Peter Costello's book deal.
If the Treasurer really is leaving Parlilament to pursue a commercial career, surely it is inappropriate to use parliamentary resources and time to pursue the major private commercial venture that would be a big-selling auto-biography.
I've already given Cossie a spray about this on 702 ABC Sydney this morning and Brendan Nelson has come out with this strong defence. We'll be chatting with 2UE's John Stanley about it at 4.05pm this afternoon.
In other stories in today's edition, we've got a strong preview of the WA News EGM tomorrow, highlighting the rorting that goes on when you have conflicted directors running their own elections. The Labor Government should have called in the AEC on this one.
Then there's the ASX conflict of interest that business heavies are belatedly concerned about. We've been banging on about this for almost a decade but no-one cared until the inevitable disaster unfolded.
Our business lists continue to grow as we've got another 15 Rich Listers, a list of Australia's 10 oldest chairmen, plus various different disclosures on our 670-strong share portfolio, which is now showing a loss of more than $55,000.
Click through to enjoy the full edition and do ya best, Stephen Mayne.
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
A tolerance of conflict of interest crops up all too frequently in Australian business, political and media life and unfortunately we're seeing it once again with Peter Costello's book deal.
If the Treasurer really is leaving Parlilament to pursue a commercial career, surely it is inappropriate to use parliamentary resources and time to pursue the major private commercial venture that would be a big-selling auto-biography.
I've already given Cossie a spray about this on 702 ABC Sydney this morning and Brendan Nelson has come out with this strong defence. We'll be chatting with 2UE's John Stanley about it at 4.05pm this afternoon.
In other stories in today's edition, we've got a strong preview of the WA News EGM tomorrow, highlighting the rorting that goes on when you have conflicted directors running their own elections. The Labor Government should have called in the AEC on this one.
Then there's the ASX conflict of interest that business heavies are belatedly concerned about. We've been banging on about this for almost a decade but no-one cared until the inevitable disaster unfolded.
Our business lists continue to grow as we've got another 15 Rich Listers, a list of Australia's 10 oldest chairmen, plus various different disclosures on our 670-strong share portfolio, which is now showing a loss of more than $55,000.
Click through to enjoy the full edition and do ya best, Stephen Mayne.
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
WA News internet luddites to the last
I'll be getting on a plane from Melbourne to Perth at 6am tomorrow morning ahead of the biggest proxy fight for control of a major boardroom that we've ever seen in Australia.
And can you believe WA News has refused to organise a webcast of the EGM which kicks off at 2.30pm Perth time at the Hyatt Regency.
It seems the incumbent board are internet luddites to the last, unlike a clear majority of ASX 200 companies which webcast their AGMs in 2007.
At the 2007 AGM, WAN even had poor old Computershare registering shareholders with huge printouts of the register because they refused to pay the extra cost of the normal electronic procedure with laptops.
I had this 10 minute chat with 720 ABC Perth Drive presenter Russell Woolf last night and stuck the neck out predicting a narrow win for the incumbent board because of that rort known as undirected proxies, whereby shareholders who just sign the form and send it back, automatically hand their votes to the chairman.
Undirected proxies typically average about 5% of the vote and will play a crucial role in tomorrow's outcome. After Korn Ferry backed outsiders Peter Abery and Margaret Seares and Seven committed to vote for them, there are only eight serious candidates in the race tomorrow and I'm hoping we get the following scenario to highlight the rorting that has been going on for years in corporate elections:
Chairman Peter Mansell: 46% of proxies, 51% after use of undirected proxies in poll
Other three incumbents: 48% of proxies, 53% after poll
Kerry Stokes and Peter Gammell: 57% of proxies, 52% after poll
Peter Avery: 60% of proxies, 55% after poll
Margaret Seares: 56.5% of proxies, 51.5% after poll
Under this scenario, chairman Peter Mansell would finish 8th, but would remain on the four member board and challenger Peter Abery would finish first but would be denied a seat. This only happens because of the "no vacancy rort", whereby WA News declared there were only four positions available on the board, even though the constitution says they can have up to 10 directors.
It is the combined use of undirected proxies with the no vacancy rort that has such a devastating effect on corporate elections. Indeed, 100% of the directed proxies in favour would still have been insufficient for me in almost 20 of my 30 board tilts.
If the above scenario plays out, there would be an outrage and the requisite change to the Corporations Law and ASX listing rules would be through in a matter of months. Companies can already handle direct election voting and it is a real shame this isn't more widespread given the undirected proxies rort.
It would be truly incredible that the largest shareholder in WAN could call an EGM for a board spill but not succeed despite winning a majority of the votes and more votes than the incumbents.
We'll have a special subscriber update on the AGM after proceedings wind up tomorrow night. I'll also be talking about it with Lindy Burns on 774 ABC Melbourne at 5.40pm tonight and then doing an interview with Radio National's Media Report on Thursday morning in Brisbane before the Rio Tinto AGM.
That's if I can keep the eyes open after catching the red-eye from Perth to Brisbane on Wednesday night.
And can you believe WA News has refused to organise a webcast of the EGM which kicks off at 2.30pm Perth time at the Hyatt Regency.
It seems the incumbent board are internet luddites to the last, unlike a clear majority of ASX 200 companies which webcast their AGMs in 2007.
At the 2007 AGM, WAN even had poor old Computershare registering shareholders with huge printouts of the register because they refused to pay the extra cost of the normal electronic procedure with laptops.
I had this 10 minute chat with 720 ABC Perth Drive presenter Russell Woolf last night and stuck the neck out predicting a narrow win for the incumbent board because of that rort known as undirected proxies, whereby shareholders who just sign the form and send it back, automatically hand their votes to the chairman.
Undirected proxies typically average about 5% of the vote and will play a crucial role in tomorrow's outcome. After Korn Ferry backed outsiders Peter Abery and Margaret Seares and Seven committed to vote for them, there are only eight serious candidates in the race tomorrow and I'm hoping we get the following scenario to highlight the rorting that has been going on for years in corporate elections:
Chairman Peter Mansell: 46% of proxies, 51% after use of undirected proxies in poll
Other three incumbents: 48% of proxies, 53% after poll
Kerry Stokes and Peter Gammell: 57% of proxies, 52% after poll
Peter Avery: 60% of proxies, 55% after poll
Margaret Seares: 56.5% of proxies, 51.5% after poll
Under this scenario, chairman Peter Mansell would finish 8th, but would remain on the four member board and challenger Peter Abery would finish first but would be denied a seat. This only happens because of the "no vacancy rort", whereby WA News declared there were only four positions available on the board, even though the constitution says they can have up to 10 directors.
It is the combined use of undirected proxies with the no vacancy rort that has such a devastating effect on corporate elections. Indeed, 100% of the directed proxies in favour would still have been insufficient for me in almost 20 of my 30 board tilts.
If the above scenario plays out, there would be an outrage and the requisite change to the Corporations Law and ASX listing rules would be through in a matter of months. Companies can already handle direct election voting and it is a real shame this isn't more widespread given the undirected proxies rort.
It would be truly incredible that the largest shareholder in WAN could call an EGM for a board spill but not succeed despite winning a majority of the votes and more votes than the incumbents.
We'll have a special subscriber update on the AGM after proceedings wind up tomorrow night. I'll also be talking about it with Lindy Burns on 774 ABC Melbourne at 5.40pm tonight and then doing an interview with Radio National's Media Report on Thursday morning in Brisbane before the Rio Tinto AGM.
That's if I can keep the eyes open after catching the red-eye from Perth to Brisbane on Wednesday night.
Where were the ASX critics a few years back?
It is great to see the likes of QBE chairman John Cloney and Commonwealth Bank CEO Ralph Norris calling for the ASX to be stripped of its regulatory powers because of the fundamental conflict of interest that comes from being market regulator and profit-driven monopoly operator.
If our biggest insurer and biggest bank are calling for a change then it will definitely happen because these players are the biggest customers of the ASX who rely on market integrity when investing billions.
However, it is more than a little disappointing that the original float of the ASX in 1998 received bipartisan political support at the time. Where is the mea culpa from Treasurer Peter Costello and the Labor Party?
I was one of the only journalists speaking out against the original demutualisation and then ran for the ASX board in 2000, 2001 and 2002 on a platform which specifically mentioned removing the conflict of interest.
Have a look at the this edited transcript of the 2000 AGM. The 5 minute campaign speech to shareholders and the board included the following:
I've got a view that they've got a pretty fundamental conflict of interest being, I know they don't use the word regulator, but being regulator and also being a money making body, and I think we've had the sentiment coming out today from some people here that they are trying to profit too much from basic things like providing information to the market....My view is they're focusing too much on the dollars and not enough on the basics of keeping a market informed and keeping the companies honest.
It is all very well for the media to bang on about this conflict as well when they gave these board tilts and campaign virtually no coverage at all when it happened.
Can anyone remember the issue of the ASX conflict being raised during the Howard years? And where is Wayne Swan on the issue right now?
If our biggest insurer and biggest bank are calling for a change then it will definitely happen because these players are the biggest customers of the ASX who rely on market integrity when investing billions.
However, it is more than a little disappointing that the original float of the ASX in 1998 received bipartisan political support at the time. Where is the mea culpa from Treasurer Peter Costello and the Labor Party?
I was one of the only journalists speaking out against the original demutualisation and then ran for the ASX board in 2000, 2001 and 2002 on a platform which specifically mentioned removing the conflict of interest.
Have a look at the this edited transcript of the 2000 AGM. The 5 minute campaign speech to shareholders and the board included the following:
I've got a view that they've got a pretty fundamental conflict of interest being, I know they don't use the word regulator, but being regulator and also being a money making body, and I think we've had the sentiment coming out today from some people here that they are trying to profit too much from basic things like providing information to the market....My view is they're focusing too much on the dollars and not enough on the basics of keeping a market informed and keeping the companies honest.
It is all very well for the media to bang on about this conflict as well when they gave these board tilts and campaign virtually no coverage at all when it happened.
Can anyone remember the issue of the ASX conflict being raised during the Howard years? And where is Wayne Swan on the issue right now?
Australia's 10 oldest big company chairmen
We had this crack at John Howard's favourite old chairman in Crikey yesterday and have now expanded it to examine the 10 oldest chairs of ASX-listed companies, including including founders, executives and non-executives:
Frank Lowy: the Westfield executive chairman was born on October 22, 1930.
Rupert Murdoch: the News Corp executive chairman was born on March 11, 1931.
Brian Healey: the Centro chairman and Incitec Pivot director is 73.
Maurice Newman: the ASX and ABC chairman turned 70 last Sunday but has promised to retire from the ASX board in October after 15 years in the chair.
Don Argus: the BHP-Billiton chairman will crack 70 this year as he was born on August 1, 1938.
Charles Goode: we made this video about old Charlie's passing years, but he's still soldiering on as ANZ chairman despite being born on August 26, 1938.
Gerry Harvey: the Harvey Norman founder and billionaire was born on September 18, 1939.
Ron Walker: The Fairfax Media chairman gave a recent interview to The AFR making his pitch to be a long-term chairman when he was born on September 20, 1939, and therefore will be 69 at this year's AGM.
Kerry Stokes: the Seven Network executive chairman was born on September 13, 1940, so this push for the WA News board is surely his last major public company play for the 67 year old who once flagged his retirement after the Sydney Olympics.
Frank Lowy: the Westfield executive chairman was born on October 22, 1930.
Rupert Murdoch: the News Corp executive chairman was born on March 11, 1931.
Brian Healey: the Centro chairman and Incitec Pivot director is 73.
Maurice Newman: the ASX and ABC chairman turned 70 last Sunday but has promised to retire from the ASX board in October after 15 years in the chair.
Don Argus: the BHP-Billiton chairman will crack 70 this year as he was born on August 1, 1938.
Charles Goode: we made this video about old Charlie's passing years, but he's still soldiering on as ANZ chairman despite being born on August 26, 1938.
Gerry Harvey: the Harvey Norman founder and billionaire was born on September 18, 1939.
Ron Walker: The Fairfax Media chairman gave a recent interview to The AFR making his pitch to be a long-term chairman when he was born on September 20, 1939, and therefore will be 69 at this year's AGM.
Kerry Stokes: the Seven Network executive chairman was born on September 13, 1940, so this push for the WA News board is surely his last major public company play for the 67 year old who once flagged his retirement after the Sydney Olympics.
Another 15 Rich Listers
The Mayne Report Rich List is getting ever closer to our goal of 1000 people worth more than $10 million. This additional 15 brings us to almost 950:
Peter Albert: head of Oxiana's Asian business, his share wealth is close to $9 million with 2.6 million shares.
Ronald Beevor: director of Oxiana Resources has a share wealth of nearly $11 million with 3.2 million shares.
John Cloney: the long-serving QBE chairman who has formed a mighty partnership with CEO Frank O'Halloran.
Barry Cusack: director of Oxiana Resources has a share wealth north of $7 million with 1.9 million shares.
Michael Eager: director of Oxiana Resources has a share wealth of nearly $8 million with 2.1 million shares.
Rob Elstone: the CEO of the ASX, his wealth has grown significantly largely due to the lucrative monopoly that is the ASX and the takeover of SFE Corp.
David Forsyth: company secretary of Oxiana Resources, his share wealth is upwards of $12 million with 3.7 million shares.
Duncan Hardie: founder and chairman of Hardie Holdings which uses Graham Richardson for lobbying and made a clear $100 million profit on one Hunter Valley deal after Planning Minister Frank Sartor came through with a rezoning.
Brian Jamieson: director of Oxiana resources has a share wealth of nearly $5 million with 1.1 million shares.
Thomas Sie Po Kiing: he joined the board of Melbourne IT in 2002 and since then his share wealth has grown upward towards $15 million.
Rob Neale: as the CEO of the New Hope Corp, the massive growth in the coal market has substantial grown his share wealth.
Maurice Newman: out-going chairman of the ASX who is worth up to $20 million, largely due to the lucrative monopoly.
Frank O'Halloran: The long-serving QBE Insurance CEO is worth more than $20 million after a stellar 30 years as either finance director or CEO.
Peter Mason: chairman of AMP his share wealth is north of $6 million and he made plenty as one of the Fab Four at Ord Minnett.
Tony D'Aloisio: booted out as ASX CEO with a $7 million payout, now the chairman of ASIC and worth nore than $10 million.
Terry Davis: group managing director and executive director of Cocoa Cola Amatil has a share wealth upward of $5 million, but made most of his money as a major shareholder in Cellarmaster.
Check out all the Mayne Report business lists here.
Peter Albert: head of Oxiana's Asian business, his share wealth is close to $9 million with 2.6 million shares.
Ronald Beevor: director of Oxiana Resources has a share wealth of nearly $11 million with 3.2 million shares.
John Cloney: the long-serving QBE chairman who has formed a mighty partnership with CEO Frank O'Halloran.
Barry Cusack: director of Oxiana Resources has a share wealth north of $7 million with 1.9 million shares.
Michael Eager: director of Oxiana Resources has a share wealth of nearly $8 million with 2.1 million shares.
Rob Elstone: the CEO of the ASX, his wealth has grown significantly largely due to the lucrative monopoly that is the ASX and the takeover of SFE Corp.
David Forsyth: company secretary of Oxiana Resources, his share wealth is upwards of $12 million with 3.7 million shares.
Duncan Hardie: founder and chairman of Hardie Holdings which uses Graham Richardson for lobbying and made a clear $100 million profit on one Hunter Valley deal after Planning Minister Frank Sartor came through with a rezoning.
Brian Jamieson: director of Oxiana resources has a share wealth of nearly $5 million with 1.1 million shares.
Thomas Sie Po Kiing: he joined the board of Melbourne IT in 2002 and since then his share wealth has grown upward towards $15 million.
Rob Neale: as the CEO of the New Hope Corp, the massive growth in the coal market has substantial grown his share wealth.
Maurice Newman: out-going chairman of the ASX who is worth up to $20 million, largely due to the lucrative monopoly.
Frank O'Halloran: The long-serving QBE Insurance CEO is worth more than $20 million after a stellar 30 years as either finance director or CEO.
Peter Mason: chairman of AMP his share wealth is north of $6 million and he made plenty as one of the Fab Four at Ord Minnett.
Tony D'Aloisio: booted out as ASX CEO with a $7 million payout, now the chairman of ASIC and worth nore than $10 million.
Terry Davis: group managing director and executive director of Cocoa Cola Amatil has a share wealth upward of $5 million, but made most of his money as a major shareholder in Cellarmaster.
Check out all the Mayne Report business lists here.
The world's biggest share portfolio and recent trading
We've built up the world's biggest small share portfolio to help with The Mayne Report's shareholder activism in the Australian market and today we can present it to you in a range of formats.
Click here to see the full list of 670 stocks as of April 18, 2008, including current market values and the paper profit or loss on individual investments. Unfortunately, after the recent downturn, we're wearing an overall paper loss of $55,242 on a portfolio which cost $241,521. This market value of $186,279 equates to a loss of 23%, which is far worse than most portfolios.
However, the news isn't all bad, because we have a policy of selling down shares that become even marginally profitable, whilst holding on to the biggest dogs, as you can see from the list of transactions in April below, including eight sales yesterday as the market rallied 3% in one day.
The full history on when we traded in these 670 shares is available here.
And check out this list of all transactions so far in 2008, along with a similar list for 2007.
We've also booked a few handy profits playing the share purchase plan game as you can see here.
Finally, here are the chronological lists for our $500 purchases in 2008, 2007, 2006 and 2005.
Transactions so far this month
April 21
Terramin Australia Ltd: sold 130 at $3.33
ARC Energy: sold 200 at $1.46
Metals X: sold 1500 at 37.5c
Cockatoo Coal: sold 600 at 92.5c
Austin Engineering: sold 200 at $2.46
Forge Group: sold 1000 at 84c
Cue Energy Resources: sold 2000 at 24.5c
Copperco Ltd: sold 800 at 64.5c
April 18
Intermoco: bought 21740 at .23c
Peoplebank Australia: bought 595 at 85c
April 17
Avoca resources Ltd: sold 200 at $2.33
Centamin Egypt: sold 300 at $1.54
NRW Holdings: bought 233 at $2.15
April 16
CMA corp: sold 816 at 62 c
April 15
Mobi Limited : bought 13,514 at 3.7c
Metex Resources: bought 2,778 at 18c
April 14
Crescent Gold: bought 1,856 at 27c
RR Australia: sold 900 at 64.5c .
April 11
Ausenco: sold 400 at $13.55
April 10
Nufarm: sold 320 at $16.65
April 7
Globe International: bought 613 at 81c
Cue Energy Resources: bought 2,500 at 20c
Sims Group: sold 13 at $33.95
Austbrokers Holdings: sold 120 at 44.07
Aquila Resources: sold 50 at $11.6
Globe International: sold 613 at 81c
April 3
Allco Equity Partner: sold 2.056 at $1.95
Avexa Ltd: sold 2000 at 32.5c
Infomedia: sold 1500 at 40.7c
Albidon Limited: sold 125 at $3.69
April 2
CP1 Ltd: sold 2,000 at 24c
Carnegie Corp: sold 1500 for 31c
News Corporation: sold 100 at $21.98
Check out all the Mayne Report business lists here. Anyone who emails through 5 corrections or additions to stephen@maynereport.com will get a free three month subscription worth $125.
Click here to see the full list of 670 stocks as of April 18, 2008, including current market values and the paper profit or loss on individual investments. Unfortunately, after the recent downturn, we're wearing an overall paper loss of $55,242 on a portfolio which cost $241,521. This market value of $186,279 equates to a loss of 23%, which is far worse than most portfolios.
However, the news isn't all bad, because we have a policy of selling down shares that become even marginally profitable, whilst holding on to the biggest dogs, as you can see from the list of transactions in April below, including eight sales yesterday as the market rallied 3% in one day.
The full history on when we traded in these 670 shares is available here.
And check out this list of all transactions so far in 2008, along with a similar list for 2007.
We've also booked a few handy profits playing the share purchase plan game as you can see here.
Finally, here are the chronological lists for our $500 purchases in 2008, 2007, 2006 and 2005.
Transactions so far this month
April 21
Terramin Australia Ltd: sold 130 at $3.33
ARC Energy: sold 200 at $1.46
Metals X: sold 1500 at 37.5c
Cockatoo Coal: sold 600 at 92.5c
Austin Engineering: sold 200 at $2.46
Forge Group: sold 1000 at 84c
Cue Energy Resources: sold 2000 at 24.5c
Copperco Ltd: sold 800 at 64.5c
April 18
Intermoco: bought 21740 at .23c
Peoplebank Australia: bought 595 at 85c
April 17
Avoca resources Ltd: sold 200 at $2.33
Centamin Egypt: sold 300 at $1.54
NRW Holdings: bought 233 at $2.15
April 16
CMA corp: sold 816 at 62 c
April 15
Mobi Limited : bought 13,514 at 3.7c
Metex Resources: bought 2,778 at 18c
April 14
Crescent Gold: bought 1,856 at 27c
RR Australia: sold 900 at 64.5c .
April 11
Ausenco: sold 400 at $13.55
April 10
Nufarm: sold 320 at $16.65
April 7
Globe International: bought 613 at 81c
Cue Energy Resources: bought 2,500 at 20c
Sims Group: sold 13 at $33.95
Austbrokers Holdings: sold 120 at 44.07
Aquila Resources: sold 50 at $11.6
Globe International: sold 613 at 81c
April 3
Allco Equity Partner: sold 2.056 at $1.95
Avexa Ltd: sold 2000 at 32.5c
Infomedia: sold 1500 at 40.7c
Albidon Limited: sold 125 at $3.69
April 2
CP1 Ltd: sold 2,000 at 24c
Carnegie Corp: sold 1500 for 31c
News Corporation: sold 100 at $21.98
Check out all the Mayne Report business lists here. Anyone who emails through 5 corrections or additions to stephen@maynereport.com will get a free three month subscription worth $125.