WA News, governance conference, HIH directors, Rich List and the pokies
February 2, 2010
Dear Mayne Reporters,
the notice of meeting for the Austar AGM arrvied this week, revealing that former HIH Insurance audit committee chairman Justin Gardiner won't be seeking re-election at the forthcoming AGM.
Hooray for that! It only took seven years after the insurer went into liquidation.
Today's edition includes three video interviews with corporate governance practitioners who make some important points about people, culture and boardrooms in Australia. Justin Gardiner's continuation on major public company boards is a classic example of the problem.
In today's edition we've also got some interesting statistics on the voting power that came from undirected proxies at the WA News EGM last week, an insight into the big pokies debate on SBS's Insight program tonight, another 15 names for the Mayne Report Rich List and all our recent trades.
Click through to enjoy it all 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.
the notice of meeting for the Austar AGM arrvied this week, revealing that former HIH Insurance audit committee chairman Justin Gardiner won't be seeking re-election at the forthcoming AGM.
Hooray for that! It only took seven years after the insurer went into liquidation.
Today's edition includes three video interviews with corporate governance practitioners who make some important points about people, culture and boardrooms in Australia. Justin Gardiner's continuation on major public company boards is a classic example of the problem.
In today's edition we've also got some interesting statistics on the voting power that came from undirected proxies at the WA News EGM last week, an insight into the big pokies debate on SBS's Insight program tonight, another 15 names for the Mayne Report Rich List and all our recent trades.
Click through to enjoy it all 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.
Revealed: full scale of undirected proxy power at WA News
We sent out this special edition of the Mayne Report last Thursday afternoon which crunched some of the numbers on the WA News voting and reached the following conclusion.
The rorting that is Australian corporate elections has finally been laid bare after the WA News board distorted the figures presented at the start of yesterday's EGM and then saved their chairman's neck by using a huge chunk of undirected proxies.
The Australian's Nick Tabakoff took an interest and sought a response from WAN, leading to the following appearing in Friday's paper:
The WAN chairman has also been forced to respond to continuing discussion about his move in voting a total of 11.7 million open proxies against the motions proposed by Mr Stokes and the independent WAN candidates, including the motion to remove Mr Mansell himself.
Shareholder activist Stephen Mayne yesterday suggested that what happened with the open proxies "will be talked about for a very long time and should be thoroughly investigated by regulators".
Mr Mansell said, however, there was nothing untoward. "Open proxies are absolutely an accepted part of corporate practice everywhere. If Stephen Mayne had looked at our proxy form, we had put there in bold that all undirected proxies would be voted by the chairman against all resolutions proposed by Seven."
As you'll see further down, the 11.7 million figure Tabakoff quoted was only for Stokes and the undirecteds were far higher for the independent challengers.
Whilst open proxies are a perfectly legal rort, my primary beef was the way WAN failed to disclose the size of the undirected proxies held by the chairman, whilst grouping them in with the directed proxies in the figures that were disclosed to the meeting as proceedings began.
This conveyed the impression that the incumbents were returned easily when the directed proxies were in fact line ball going into the poll.
Undirected or open proxies can only be voted in a poll and should not be included in the directed proxies figures which close 48 hours before a meeting and are normally disclosed after the debate but before any poll.
The proxy form did indeed include the following in bold underlined type immediately under the voting boxes: "The Chairman of the Meeting intends to vote undirected proxies AGAINST each of the items of business."
The really interesting statistic is to assess what proportion the undirecteds were of the total vote and of the against vote which the board wanted. Here's how the numbers stack up on the key resolutions:
Sacking insider chairman Peter Mansell: chairman had 10.7 million undirecteds which was 13.82% of the 77.37 million shares which supported him and 7.46% of the total votes cast after the poll. He was gone without them.
Appointing Seven-backed outsider Margaret Seares: chairman had 15.54 million undirecteds which was a whopping 20.93% of her 74.23 million against votes and 11.02% of the total cast after the poll. She would be a director but for the undirecteds.
Appointing Kerry Stokes: chairman had 11.73 million undirecteds which was 13.61% of the 86.15 million against votes and 8.12% of the total votes cast after the poll.
Appointing unbacked Stephen Mayne: chairman held 16.05 million undirecteds which was 18.74% of the 85.63 million against votes and 17.32% of the total votes cast after the poll.
So, let's see now. We've just had our first ever major proxy fight for control of an Australian boardroom and the incumbents survived by using blank voting forms which accounted for 21% of the total votes rejecting the most popular challenger and 17.32% of all votes cast on my resolution.
I got up at the big Risk Metrics governance conference in Melbourne yesterday and asked the world's first Corporate Governance Minister, Senator Nick Sherry, if he was looking into corporate election processes and specifically the situation with undirected proxies.
All he would say is that he was aware of it, although he did encourage participants to email him some suggestions for improvements.
This issue is so blatant and so easily fixed that I'll be writing to him shortly.
All it will take is a requirement that shareholders have to specifically tick a box if they want the chairman to have an undirected proxy on a specific resolution.
The rorting that is Australian corporate elections has finally been laid bare after the WA News board distorted the figures presented at the start of yesterday's EGM and then saved their chairman's neck by using a huge chunk of undirected proxies.
The Australian's Nick Tabakoff took an interest and sought a response from WAN, leading to the following appearing in Friday's paper:
The WAN chairman has also been forced to respond to continuing discussion about his move in voting a total of 11.7 million open proxies against the motions proposed by Mr Stokes and the independent WAN candidates, including the motion to remove Mr Mansell himself.
Shareholder activist Stephen Mayne yesterday suggested that what happened with the open proxies "will be talked about for a very long time and should be thoroughly investigated by regulators".
Mr Mansell said, however, there was nothing untoward. "Open proxies are absolutely an accepted part of corporate practice everywhere. If Stephen Mayne had looked at our proxy form, we had put there in bold that all undirected proxies would be voted by the chairman against all resolutions proposed by Seven."
As you'll see further down, the 11.7 million figure Tabakoff quoted was only for Stokes and the undirecteds were far higher for the independent challengers.
Whilst open proxies are a perfectly legal rort, my primary beef was the way WAN failed to disclose the size of the undirected proxies held by the chairman, whilst grouping them in with the directed proxies in the figures that were disclosed to the meeting as proceedings began.
This conveyed the impression that the incumbents were returned easily when the directed proxies were in fact line ball going into the poll.
Undirected or open proxies can only be voted in a poll and should not be included in the directed proxies figures which close 48 hours before a meeting and are normally disclosed after the debate but before any poll.
The proxy form did indeed include the following in bold underlined type immediately under the voting boxes: "The Chairman of the Meeting intends to vote undirected proxies AGAINST each of the items of business."
The really interesting statistic is to assess what proportion the undirecteds were of the total vote and of the against vote which the board wanted. Here's how the numbers stack up on the key resolutions:
Sacking insider chairman Peter Mansell: chairman had 10.7 million undirecteds which was 13.82% of the 77.37 million shares which supported him and 7.46% of the total votes cast after the poll. He was gone without them.
Appointing Seven-backed outsider Margaret Seares: chairman had 15.54 million undirecteds which was a whopping 20.93% of her 74.23 million against votes and 11.02% of the total cast after the poll. She would be a director but for the undirecteds.
Appointing Kerry Stokes: chairman had 11.73 million undirecteds which was 13.61% of the 86.15 million against votes and 8.12% of the total votes cast after the poll.
Appointing unbacked Stephen Mayne: chairman held 16.05 million undirecteds which was 18.74% of the 85.63 million against votes and 17.32% of the total votes cast after the poll.
So, let's see now. We've just had our first ever major proxy fight for control of an Australian boardroom and the incumbents survived by using blank voting forms which accounted for 21% of the total votes rejecting the most popular challenger and 17.32% of all votes cast on my resolution.
I got up at the big Risk Metrics governance conference in Melbourne yesterday and asked the world's first Corporate Governance Minister, Senator Nick Sherry, if he was looking into corporate election processes and specifically the situation with undirected proxies.
All he would say is that he was aware of it, although he did encourage participants to email him some suggestions for improvements.
This issue is so blatant and so easily fixed that I'll be writing to him shortly.
All it will take is a requirement that shareholders have to specifically tick a box if they want the chairman to have an undirected proxy on a specific resolution.
Governance conference video, audio and Crikey
We took our cameras to the big Risk Metrics conference yesterday and interviewed three of Australia's leading corporate governance practitioners as follows:
Interview with Risk Metrics chief Dean Paatsh
Meet former AIMA boss Ian Matheson
Meet governance heavy Erik Mather
The panels were quite interesting and you can listen to the comment about independent experts reports and the lack of independence. AFIC CEO Ross Barker came out very hard against schemes of arrangement which was supported by session moderator Robert Gottliebsen who covered the debate in Business Spectator today.
Meanwhile, all of the recent Crikey contributions are available here, but today's hard-hitting governance-focused contributions were as follows:
Conflicts aplenty in NSW power privatisation debate
What is Labor's problem with strong corporate governance?
Interview with Risk Metrics chief Dean Paatsh
Meet former AIMA boss Ian Matheson
Meet governance heavy Erik Mather
The panels were quite interesting and you can listen to the comment about independent experts reports and the lack of independence. AFIC CEO Ross Barker came out very hard against schemes of arrangement which was supported by session moderator Robert Gottliebsen who covered the debate in Business Spectator today.
Meanwhile, all of the recent Crikey contributions are available here, but today's hard-hitting governance-focused contributions were as follows:
Conflicts aplenty in NSW power privatisation debate
What is Labor's problem with strong corporate governance?
Tune into the big pokies debate tonight
Australians are the world's biggest losers when it comes to the pokies and given Kevin Rudd's new tax on alcopops, surely it can't be long before Australia's most notorious "sin industry" cops it in the neck.
On the SBS Insight program at 7:30pm tonight, Jenny Brockie will host a forum bringing together the main players in the pokies debate.
With anti-pokies independent Senator Nick Xenophon, the anti-gambling lobby will have an important new ally in Canberra. The South Australian giant killer came face to face with gaming industry types at the Insight forum in what I'm told was an interesting exchange.
Jenny Macklin joined the discussion from Canberra, acknowledging the fact that something needed to be done and that Kevin Rudd seemed very passionate about this issue. However, she was very vague on specific measures.
Businessman Peter Holmes a Court explained what's happened since he and Russell Crowe scrapped all poker machines from his South Sydney Leagues Club.
The pokies industry was represented by Anthony Ball, the Executive Manager - Policy and Development with Clubs NSW and Ross Ferrar, the Executive Officer of the Australasian Gaming Machine Manufacturers Association.
Tim Freedman, lead singer of The Whitlams, described how his passion against pokies inspired a song that is probably one of his most popular.
Dr Charles Livingstone who just completed a three-year government funded study into electronic gaming machine technology and how it influences the way people gamble added the research component.
Gabriela Byrne, ex-problem gambler, well known anti-pokies activist and Mayne Report office co-ordinator was joined by 4 other consumer voices. The most powerful was a young mother with 4 children called Laura who did 9 months in prison (pregnant with her youngest daughter) because of a pokie-addiction related crime.
The debate was lively, well facilitated and attracted many worthwhile suggestions about what could be done brought forward by the participants. These were constantly attacked by the industry representatives who kept repeating the fact that they cared and didn't want problem gamblers in their venues.
Meanwhile, it was good to see Aristocrat shares plunge 32c to a three year low of $7.72 today after a disappointing AGM in Sydney. Long may they continue to decline.
On the SBS Insight program at 7:30pm tonight, Jenny Brockie will host a forum bringing together the main players in the pokies debate.
With anti-pokies independent Senator Nick Xenophon, the anti-gambling lobby will have an important new ally in Canberra. The South Australian giant killer came face to face with gaming industry types at the Insight forum in what I'm told was an interesting exchange.
Jenny Macklin joined the discussion from Canberra, acknowledging the fact that something needed to be done and that Kevin Rudd seemed very passionate about this issue. However, she was very vague on specific measures.
Businessman Peter Holmes a Court explained what's happened since he and Russell Crowe scrapped all poker machines from his South Sydney Leagues Club.
The pokies industry was represented by Anthony Ball, the Executive Manager - Policy and Development with Clubs NSW and Ross Ferrar, the Executive Officer of the Australasian Gaming Machine Manufacturers Association.
Tim Freedman, lead singer of The Whitlams, described how his passion against pokies inspired a song that is probably one of his most popular.
Dr Charles Livingstone who just completed a three-year government funded study into electronic gaming machine technology and how it influences the way people gamble added the research component.
Gabriela Byrne, ex-problem gambler, well known anti-pokies activist and Mayne Report office co-ordinator was joined by 4 other consumer voices. The most powerful was a young mother with 4 children called Laura who did 9 months in prison (pregnant with her youngest daughter) because of a pokie-addiction related crime.
The debate was lively, well facilitated and attracted many worthwhile suggestions about what could be done brought forward by the participants. These were constantly attacked by the industry representatives who kept repeating the fact that they cared and didn't want problem gamblers in their venues.
Meanwhile, it was good to see Aristocrat shares plunge 32c to a three year low of $7.72 today after a disappointing AGM in Sydney. Long may they continue to decline.
Another 15 rich listers
We did a major upgrade of the Mayne Report Rich List over the long weekend and now have more than 950 names of Australians we reckon are worth more than $10 million. Here are the 15 newest entries:
Paul Brunner: the retiring Boart Longyear chief executive departs a much wealthier man. He reportedly received about $80 million from a $2.7 billion float last year.
Colin De lutis: the Westco Jeans founder who owns CBD properties, is great mates with Eddie McGuire, bought the Bradmill denim mill in Melbourne and even tried to become a director of the Carlton Football Club.
Geoff Dixon: current CEO of QANTAS whose renumeration package has seen his wealth accumulate upwards of $5 million a year.
Michael Figg: in 2003 Sydney based private investor paid $20.85 million for 55 Swanston St. He then subdivided and sold the three ground-floor shops for $15 million and has continued to divide the 10 levels of office space above.
Andrew Grover: co-founder of recruitment company Gemteq Executive which was sold in February for $19.5 million. Current director of LAPD Pty Ltd which recently purchased a corner site near Crown Casino for $6 million.
Ian Huntley: founder of Huntleys' Investment Information and Huntleys' Investment Company, he has provided commentary and recommendations for the Australian share market for over 30 years. Well known to Australian stock market investors, his newsletter Huntley's Newsletters is the mainstay in the online newsletter business.
Stephen Leung: private investor and part-time property developer, he sold the Australian Natives Association building in Elizabeth Street Melbourne last year for a reported $9.6 million.
Phil Mehrten: founding director of Probuild constructions. He has become known for completing projects on itme and on budget. Under his leadership, annual turnover has increased from $20 million in 1987 to $300 milllion.
Andrew Muir: the Good Guys boss purchased disgraced businessman Steve Vizard's Orrong Rd mansion last year for a record $17.75 million.
Luke Mullins: co-founder of recruitment company Gemteq Executive which was sold in February for $19.5 million. Current director of LAPD Pty Ltd which recently purchased a corner site near Crown Casino for $6 million.
John Rothfield: Dr Turf is best known for his media punting commentary but is also an astute property investor in Melbourne who is worth more than $10 million.
Norm Seckold: mining entrepreneur, former chairman and managing director of Bolnisi Gold, he recently sold off $95 million worth of stock out of Opes Prime - some say this transaction triggered the unraveling of the fraud and the eventual collapse of Opes Prime.
Mike Wilkins: former Promina boss and now deputy CEO of the struggling Insurance Australia Group. Received a large payout when Suncorp bought Promina in 2006.
Peter Wilson: managing director of the Spotless Group owns a share package of 2.7 million shares worth upwards of $8 million.
David Wolf: founder of property developing company Monreid which is currently developing a 25 level building at 560 Flinders Street Melbourne. Sixty five percent has been sold off plan with each floor averaging $1.3 million.
Paul Brunner: the retiring Boart Longyear chief executive departs a much wealthier man. He reportedly received about $80 million from a $2.7 billion float last year.
Colin De lutis: the Westco Jeans founder who owns CBD properties, is great mates with Eddie McGuire, bought the Bradmill denim mill in Melbourne and even tried to become a director of the Carlton Football Club.
Geoff Dixon: current CEO of QANTAS whose renumeration package has seen his wealth accumulate upwards of $5 million a year.
Michael Figg: in 2003 Sydney based private investor paid $20.85 million for 55 Swanston St. He then subdivided and sold the three ground-floor shops for $15 million and has continued to divide the 10 levels of office space above.
Andrew Grover: co-founder of recruitment company Gemteq Executive which was sold in February for $19.5 million. Current director of LAPD Pty Ltd which recently purchased a corner site near Crown Casino for $6 million.
Ian Huntley: founder of Huntleys' Investment Information and Huntleys' Investment Company, he has provided commentary and recommendations for the Australian share market for over 30 years. Well known to Australian stock market investors, his newsletter Huntley's Newsletters is the mainstay in the online newsletter business.
Stephen Leung: private investor and part-time property developer, he sold the Australian Natives Association building in Elizabeth Street Melbourne last year for a reported $9.6 million.
Phil Mehrten: founding director of Probuild constructions. He has become known for completing projects on itme and on budget. Under his leadership, annual turnover has increased from $20 million in 1987 to $300 milllion.
Andrew Muir: the Good Guys boss purchased disgraced businessman Steve Vizard's Orrong Rd mansion last year for a record $17.75 million.
Luke Mullins: co-founder of recruitment company Gemteq Executive which was sold in February for $19.5 million. Current director of LAPD Pty Ltd which recently purchased a corner site near Crown Casino for $6 million.
John Rothfield: Dr Turf is best known for his media punting commentary but is also an astute property investor in Melbourne who is worth more than $10 million.
Norm Seckold: mining entrepreneur, former chairman and managing director of Bolnisi Gold, he recently sold off $95 million worth of stock out of Opes Prime - some say this transaction triggered the unraveling of the fraud and the eventual collapse of Opes Prime.
Mike Wilkins: former Promina boss and now deputy CEO of the struggling Insurance Australia Group. Received a large payout when Suncorp bought Promina in 2006.
Peter Wilson: managing director of the Spotless Group owns a share package of 2.7 million shares worth upwards of $8 million.
David Wolf: founder of property developing company Monreid which is currently developing a 25 level building at 560 Flinders Street Melbourne. Sixty five percent has been sold off plan with each floor averaging $1.3 million.
Our latest shares trades
Here are our latest share trades since we last disclosed in the April 22 edition.
April 29
Hyro Limited: bought 18,519 at 2.7c
April 24
Acrux Limited: bought 625 at 80c
Coal Of Africa: sold 200 at $2.85
April 23
Astron Limited: sold 250 for $2.08
Praemium Limited: bought 1,191 at 42c
April 22
RP Data: sold 700 at $1.21
Click here to see the full list of 673 stocks as of April 18, 2008, including current market values and the paper profit or loss on individual investments.
The full history on when we traded in these 673 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.
April 29
Hyro Limited: bought 18,519 at 2.7c
April 24
Acrux Limited: bought 625 at 80c
Coal Of Africa: sold 200 at $2.85
April 23
Astron Limited: sold 250 for $2.08
Praemium Limited: bought 1,191 at 42c
April 22
RP Data: sold 700 at $1.21
Click here to see the full list of 673 stocks as of April 18, 2008, including current market values and the paper profit or loss on individual investments.
The full history on when we traded in these 673 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.