Two ASX videos, Costello, ASIC, iiNet and The AFR
May 9, 2008
Dear Mayne Reporters,
We've only been averaging 2-3 videos a week in recent months, so today we've come up with something really special - a double-header.
This morning I turned up at the joint AFR-ASX investment seminar at Crown Casino and stumbled across a raging conflict of interest that was explained in this Crikey story.
We've followed up with this video from the casino hotel explaining the problem and visualising the incriminating material which shows The AFR colluding with the profit-obsessed ASX to promote dangerous financial products such as CFDs, when they should be leading the public campaign for reform.
There's also this second companion video explaining how the ASX has shafted Melbourne by severely downgrading its Collins Street presence to what is now, frankly, an insult.
In other stories today we're hot on the case of Australia's third largest ISP, Perth-based iiNet, over an insiders share placement this week that lacked any accompanying share purchase plan for us small investors. Read the full edition to see the email exchange with the largest shareholder that will hopefully turn this around next week.
We've also got a strong story about Peter Costello's grotesque abuses of power whilst Treasurer and we celebrate the fact that ASIC managed to put someone in jail today, ending a 41-day drought. Hooray for the plod!
Do ya best, Stephen Mayne
We've only been averaging 2-3 videos a week in recent months, so today we've come up with something really special - a double-header.
This morning I turned up at the joint AFR-ASX investment seminar at Crown Casino and stumbled across a raging conflict of interest that was explained in this Crikey story.
We've followed up with this video from the casino hotel explaining the problem and visualising the incriminating material which shows The AFR colluding with the profit-obsessed ASX to promote dangerous financial products such as CFDs, when they should be leading the public campaign for reform.
There's also this second companion video explaining how the ASX has shafted Melbourne by severely downgrading its Collins Street presence to what is now, frankly, an insult.
In other stories today we're hot on the case of Australia's third largest ISP, Perth-based iiNet, over an insiders share placement this week that lacked any accompanying share purchase plan for us small investors. Read the full edition to see the email exchange with the largest shareholder that will hopefully turn this around next week.
We've also got a strong story about Peter Costello's grotesque abuses of power whilst Treasurer and we celebrate the fact that ASIC managed to put someone in jail today, ending a 41-day drought. Hooray for the plod!
Do ya best, Stephen Mayne
Peter Costello's abuse of power
As Peter Costello continues to beaver away on his memoirs, there is a rather long shopping list of issues that he really should clarify once and for all.
Out of pure self-interest, I'd love to know what really drove the churlish budget lock-up ban on Crikey, but there are far more important issues to consider.
The newest entry came from lobbyist Gabriel McDowell at the MEAA public affairs conference on Wednesday. The long time Lion Nathan spindoctor revealed that he along with the two chief executives who funded the controversial $6 million beer excise campaign in 2000, Ted Kunkel from Foster's and Gordon Cairns from Lion Nathan, all copped personal tax audits shortly after the government back-flipped. Did Costello's power extend to ordering personal tax audits on his critics? Certainly not according to any legislation on the statute books and we should stress that McDowell publically said it must have been a coincidence.
We've also got what the law claims to be an independent Reserve Bank, although 774 ABC Melbourne morning presenter Jon Faine revealed last November that Costello had privately gloated that the bank would not dare lift official interest during the election campaign. Alan Ramsey chewed through the entrails of that one at the time, but you start to get a picture of a man hell-bent on using all his legal power, plus some.
Telstra certainly formed that view when Costello and his ACCC mate Graeme Samuel drove the decision to give the Singapore Government-controlled Optus a $1 billion subsidy rather than accommodate the company's broadband plans. Then there was the way ASIC put out this press release trumpeting an investigation into Telstra disclosure practices and this follow-up stressing that no politician would be interviewed as part of the probe. You can see the hand of Costello's office in both.
Another corporate critic who really copped it was ANZ chief economist Saul Eslake, as was fully explained on Peter Martin's blog. Eslake's sin was some fairly mild criticism of government accounting, which led to Costello threatening adverse regulatory decisions against ANZ.
There are also many journalists who got directly threatened by Costello or suffered heavy complaints to their superiors. Cossie should clear the air in his memoir as to the heinous crimes committed by the likes of Tim Colebatch, Michael Bachelard, Ross Gittins and Fleur Anderson, who all got the full treatment at various times.
Bachelard was The Age reporter who broke the story about Tanya Costello's six figure job at the ANZ which was set up by a head hunter with close Liberal Party and personal connections to the former Treasurer. It was a no brainer of a story, but the fury and anger which flowed from Costello afterwards was something to behold.
The irony of the great feud between the two leading Liberals of the past 15 years – Jeff Kennett and Peter Costello – is that history will judge them both to have been complete thugs in their dealings with critics. No wonder they persist in fighting to the death with each other. And no wonder Australia has a press culture of supporting whoever happens to be the government of the day, as Telstra's Phil Burgess pointed out this week.
Kennett at least had the good sense to not try and justify himself in a book, but given Costello's attempt to cash and in secure his place in history, he may as well clear the air on all these issues.
Wayne Swan has a lot to live up to next Tuesday, but at least he appears to accept the democratic notion that critics have a right to be heard.
I'll be in Canberra for the lock-up and one of our video guys is coming too, so we'll be back with an edition focusing on the corporate governance aspects of the budget next Wednesday.
Out of pure self-interest, I'd love to know what really drove the churlish budget lock-up ban on Crikey, but there are far more important issues to consider.
The newest entry came from lobbyist Gabriel McDowell at the MEAA public affairs conference on Wednesday. The long time Lion Nathan spindoctor revealed that he along with the two chief executives who funded the controversial $6 million beer excise campaign in 2000, Ted Kunkel from Foster's and Gordon Cairns from Lion Nathan, all copped personal tax audits shortly after the government back-flipped. Did Costello's power extend to ordering personal tax audits on his critics? Certainly not according to any legislation on the statute books and we should stress that McDowell publically said it must have been a coincidence.
We've also got what the law claims to be an independent Reserve Bank, although 774 ABC Melbourne morning presenter Jon Faine revealed last November that Costello had privately gloated that the bank would not dare lift official interest during the election campaign. Alan Ramsey chewed through the entrails of that one at the time, but you start to get a picture of a man hell-bent on using all his legal power, plus some.
Telstra certainly formed that view when Costello and his ACCC mate Graeme Samuel drove the decision to give the Singapore Government-controlled Optus a $1 billion subsidy rather than accommodate the company's broadband plans. Then there was the way ASIC put out this press release trumpeting an investigation into Telstra disclosure practices and this follow-up stressing that no politician would be interviewed as part of the probe. You can see the hand of Costello's office in both.
Another corporate critic who really copped it was ANZ chief economist Saul Eslake, as was fully explained on Peter Martin's blog. Eslake's sin was some fairly mild criticism of government accounting, which led to Costello threatening adverse regulatory decisions against ANZ.
There are also many journalists who got directly threatened by Costello or suffered heavy complaints to their superiors. Cossie should clear the air in his memoir as to the heinous crimes committed by the likes of Tim Colebatch, Michael Bachelard, Ross Gittins and Fleur Anderson, who all got the full treatment at various times.
Bachelard was The Age reporter who broke the story about Tanya Costello's six figure job at the ANZ which was set up by a head hunter with close Liberal Party and personal connections to the former Treasurer. It was a no brainer of a story, but the fury and anger which flowed from Costello afterwards was something to behold.
The irony of the great feud between the two leading Liberals of the past 15 years – Jeff Kennett and Peter Costello – is that history will judge them both to have been complete thugs in their dealings with critics. No wonder they persist in fighting to the death with each other. And no wonder Australia has a press culture of supporting whoever happens to be the government of the day, as Telstra's Phil Burgess pointed out this week.
Kennett at least had the good sense to not try and justify himself in a book, but given Costello's attempt to cash and in secure his place in history, he may as well clear the air on all these issues.
Wayne Swan has a lot to live up to next Tuesday, but at least he appears to accept the democratic notion that critics have a right to be heard.
I'll be in Canberra for the lock-up and one of our video guys is coming too, so we'll be back with an edition focusing on the corporate governance aspects of the budget next Wednesday.
After 41 days, ASIC breaks the jail drought
Hooray for ASIC, they've put someone in the slammer this afternoon, ending a 41 day drought. The press release explains the details and we've entered the following on our master ASIC jail list:
312. 9 May 2008 - Mr Kym Andrew Sellers of Morphettville in South Australia was today sentenced to four years jail with a two-year non-parole period. On 7 April 2008, Mr Sellers, 32, pleaded guilty to 16 charges of dishonestly using his position as a designated trading representative with Taylor Collison Limited to obtain more than $441,000.
Crooked broker pleads guilty after being caught stelling $441,000 from 12 clients. It's not that hard when Taylor Collinson handed him in.
That's 312 scalps in 17 years for our corporate plod but chairman Tony D'Aloisio is still yet to land any big names since he started 12 months ago. Have you heard of any of D'Aloisio's victims?
12 July 2007 - Richard James Blundell
13 July 2007 - Marcel Ivan Shears
16 July 2007 -Paul John Blundell
8 August 2007 - Edward Lawrence
31 August 2007 - Mark Alan Taylor
10 September 2007 - John Gerard Sage
12 September 2007 - Anthony John Brownlee
15 October 2007- Stuart Adrian Corp & Mr Brian Millwood Smith
2 November 2007- Piet Cornelius Walters
21 November 2007 - Robert Orehek
21 December 2007 - Peter Robert Woodland
1 February 2008 - Michael Kwong
18 Februrary 2008 - Dominic Cincotta
20 February 2008 -Ronald William Wynhoven
29 February 2008 - Randolph Raymond
28 March 2008 - Mr Tunde Doja
Not a big name amongst them that would have generated any decent publicity and sent associated deterrent messages to all those corporate crooks out there.
That said, it is good that ASIC has achieved a quick guilty verdict against the biggest Westpoint promoter Neil Burnard and, especially after fighting the charges, he'll hopefully get a decent stretch when he's sentenced on June 20.
312. 9 May 2008 - Mr Kym Andrew Sellers of Morphettville in South Australia was today sentenced to four years jail with a two-year non-parole period. On 7 April 2008, Mr Sellers, 32, pleaded guilty to 16 charges of dishonestly using his position as a designated trading representative with Taylor Collison Limited to obtain more than $441,000.
Crooked broker pleads guilty after being caught stelling $441,000 from 12 clients. It's not that hard when Taylor Collinson handed him in.
That's 312 scalps in 17 years for our corporate plod but chairman Tony D'Aloisio is still yet to land any big names since he started 12 months ago. Have you heard of any of D'Aloisio's victims?
12 July 2007 - Richard James Blundell
13 July 2007 - Marcel Ivan Shears
16 July 2007 -Paul John Blundell
8 August 2007 - Edward Lawrence
31 August 2007 - Mark Alan Taylor
10 September 2007 - John Gerard Sage
12 September 2007 - Anthony John Brownlee
15 October 2007- Stuart Adrian Corp & Mr Brian Millwood Smith
2 November 2007- Piet Cornelius Walters
21 November 2007 - Robert Orehek
21 December 2007 - Peter Robert Woodland
1 February 2008 - Michael Kwong
18 Februrary 2008 - Dominic Cincotta
20 February 2008 -Ronald William Wynhoven
29 February 2008 - Randolph Raymond
28 March 2008 - Mr Tunde Doja
Not a big name amongst them that would have generated any decent publicity and sent associated deterrent messages to all those corporate crooks out there.
That said, it is good that ASIC has achieved a quick guilty verdict against the biggest Westpoint promoter Neil Burnard and, especially after fighting the charges, he'll hopefully get a decent stretch when he's sentenced on June 20.
Pressuring for an iiNet SPP
Companies which do placements with institutions whilst not offering a similar deal to their retail shareholders are public enemy number one for The Mayne Report, so when Perth-based ISP iiNet pulled it on this week, we tried a new tactic of emailing the boss of Amcom Telecom, the largest shareholder of iiNet, which also happened to be in receipt of the cheap placement. Here is the full exchange:
From: Stephen Mayne
Sent: Thursday, 8 May 2008 7:39 PM
To: Clive Stein
Cc: David Hinton
Subject: iinet capital raising
Hi Clive, I'm a small shareholder in 685 Australian companies and track those which do placements with insiders without following through with a share purchase plan for small investors. It appears that iinet is proposing to do this.
The vast majority of big companies (Macquarie, Nufarm, Ausenco, Bendigo Bank, Origin etc) do the right thing in this situation.
You can see the shame file of those that don't here. And here is a video I made after attending the Skilled EGM when they did the wrong thing.
Could you have a word with iinet CEO Michael Malone and encourage him to do right thing here. It is patently not fair that your company gets offered stock at $1.60 and the rest of us shareholders don't.
I'd rather not have to bother getting to Perth for the June 13 EGM, so it would be easier for all concerned if an SPP was announced pronto.
As the largest shareholder, you are no doubt in a position to insist this occur.
I look forward to your reply.
Regards, Stephen Mayne
publisher www.maynereport.com
Australia's leading corporate governance ezine
The reply came back from Amcom company secretary David Hinton this afternoon:
Stephen,
Thank you for your email.
We have discussed the matter of an SPP with our Chairman, Tony Grist who is also a Director of iiNet and also with Clive. We will take the matter up with Michael Malone next week.
regards
David Hinton
Company Secretary
If they decline to oblige, they can't say they weren't warned.
Sent: Thursday, 8 May 2008 7:39 PM
To: Clive Stein
Cc: David Hinton
Subject: iinet capital raising
Hi Clive, I'm a small shareholder in 685 Australian companies and track those which do placements with insiders without following through with a share purchase plan for small investors. It appears that iinet is proposing to do this.
The vast majority of big companies (Macquarie, Nufarm, Ausenco, Bendigo Bank, Origin etc) do the right thing in this situation.
You can see the shame file of those that don't here. And here is a video I made after attending the Skilled EGM when they did the wrong thing.
Could you have a word with iinet CEO Michael Malone and encourage him to do right thing here. It is patently not fair that your company gets offered stock at $1.60 and the rest of us shareholders don't.
I'd rather not have to bother getting to Perth for the June 13 EGM, so it would be easier for all concerned if an SPP was announced pronto.
As the largest shareholder, you are no doubt in a position to insist this occur.
I look forward to your reply.
Regards, Stephen Mayne
publisher www.maynereport.com
Australia's leading corporate governance ezine
The reply came back from Amcom company secretary David Hinton this afternoon:
Stephen,
Thank you for your email.
We have discussed the matter of an SPP with our Chairman, Tony Grist who is also a Director of iiNet and also with Clive. We will take the matter up with Michael Malone next week.
regards
David Hinton
Company Secretary
If they decline to oblige, they can't say they weren't warned.
Today's six share trades and Bendigo SPP
We promised complete disclosure at The Mayne Report, so go here to view the world's biggest small share portfolio. Below are today's trades as we take advantage of the market's continuing recovery to pay down some of the $28,000 margin loan.
May 9
Ebet limited: bought 10,000 at 5c
Aurox Resources: sold 600 at 91.5c
Acrux Limited: sold 935 at 95c
NRW Holdings: sold 300 at $2.20
Sunshine Gas Limited: sold 250 at $1.95
Alliance Resources: sold 589 at $1.14
We also had a good result with the Bendigo Bank share purchase plan this week. The offer was 300 shares at $9.60 and we tipped them out on Tuesday at $12.44 a pop, pocketing a profit of $852, which made a small contribution to our wages bill for the four staff this week.
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.
Ebet limited: bought 10,000 at 5c
Aurox Resources: sold 600 at 91.5c
Acrux Limited: sold 935 at 95c
NRW Holdings: sold 300 at $2.20
Sunshine Gas Limited: sold 250 at $1.95
Alliance Resources: sold 589 at $1.14
We also had a good result with the Bendigo Bank share purchase plan this week. The offer was 300 shares at $9.60 and we tipped them out on Tuesday at $12.44 a pop, pocketing a profit of $852, which made a small contribution to our wages bill for the four staff this week.
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.