Brad Cooper, HIH, underperforming News Corp

2. Eddie puts Brad Cooper in the Steve Vizard basket



By Stephen Mayne

For someone with such a colourful collection of friends, Eddie McGuire manages to surf on regardless when the law catches up with his old mates and business partners. While more than one million Australians were watching Who Wants to be a Millionaire? last night, Eddie's great mate Brad Cooper was getting used to prison food at Silverwater.

Legend has it that Eddie met Cooper while celebrating Collingwood's 1990 premiership win in the back of a car and together they ran the Collingwood board election ticket that made Eddie president in 1998.

There was all this talk of the lads having a "special relationship" and they even holidayed together with their partners on the fabulously expensive QEII. They were both battlers from the Melbourne's working class northern suburbs who made good, although Cooper was always dodgy given his pedigree of being a car thief who left school at 14.

That didn't stop him from graduating into the Sydney spivs club and costing FAI and HIH about $100 million in bad business moves, dodgy investments and bogus claims lodged through incessant badgering, often when he was wired to the gills on cocaine.

Cooper used to be on the Eddie Herald Sun plugfest gravy train. This is from Eddie's column in July 1999, plugging National Kindness Week:

"The man behind National Kindness Week is Brad Cooper, the chairman of FAI Security, one of Australia's premier business speakers and vice-president of Collingwood FC. Cooper is based in Sydney and came up with the idea that for a week a year people should be encouraged not to buy something but to do something to make the world a better place."

What an embarrassment for all concerned!

The relationship didn't end there. Collingwood extracted a $250,000 sponsorship from FAI as the business collapsed and former Collingwood director David Galbally QC was offered up as Cooper's counsel at the HIH Royal Commission.

However, the plugs have long since dried up and Cooper bailed from the Collingwood board three years ago, never to be mentioned again publicly by President Eddie. After all, it wouldn't be good for Eddie's brand if he was seen to associate with a disgraced fraudster, even if he is, or was, one of his best mates. There was no comment offered yesterday and don't expect anything when Cooper's sentencing submissions commence on December 2.

The same applied with Steve Vizard, Eddie's former Toorak neighbour and business partner who received no character reference from Eddie in court during his insider trading nightmare.

However, Eddie did manage to plug him Vizard as a father of the year on Who Wants to be a Millionaire in the week the former funnyman faced court. It would be a touch more difficult framing a question on national television to portray Cooper in a good light and thankfully Eddie didn't even try last night.



3. The HIH scorecard



By Stephen Mayne

HIH Insurance collapsed back on March 15, 2001 and in April 2003, Royal Commissioner Justice Neville Owen released his final report and recommended a slew of charges.

The wheels of justice grind slowly, but the corporate plod is batting reasonably well so far as founder Ray Williams, former FAI boss and HIH director Rodney Adler and HIH's Australian managing director Terry Cassidy have all volunteered themselves for some porridge by pleading guilty.

After an expensive 44 day jury trial, ASIC secured its first contested guilty verdict against Brad Cooper yesterday and he is likely to get at least five years without parole given the not guilty plea and the thirteen charges.

This more than compensates for the earlier defeat in June this year when former HIH deputy chairman Charles Abbott beat a criminal charge over misusing his position. However, charges against other key players such as finance director Dominic Fodera have only just been laid so there is still plenty of action to come and if anything, the cases get more tricky from here on. This is the current state of play of the various HIH charges:

Brad Cooper: guilty of 13 counts, sentencing submissions begin on December 2. Likely to get at least five years without parole.

Ray Williams: pleaded guilty to three charges of knowingly making misleading statements. Sentenced to four-and-a-half years' jail on April 15 with a non-parole period of two years and nine months.

Rodney Adler: pleaded guilty to four charges and sentenced to four-and-a-half years' jail, with a non-parole period of two-and-a-half years on April 14 this year.

Terry Cassidy: the former head of HIH in Australia, pleaded guilty to three charges and was sentenced to 15 months jail, but will be released on 28 February 2006 after serving ten months.

Charles Abbott: former deputy chairman faced one criminal charge over misusing his position by getting a cheque for $181,455 cleared expeditiously on the day it collapsed. Unlike many others, fought the charge and it was dismissed on June 7.

Tim Mainprize, Stephen Burroughs and Daniel Wilkie: Former FAI and HIH executives were the first charged way back in July 2003 over the bogus reinsurance deals but their cases have still not been resolved.

Bill Howard: pleaded guilty to two charges of criminal misconduct over receiving bribes from Brad Cooper and received a three year suspended sentence.

Dominic Fodera: former finance director recently charged with six criminal appearances. Will appear again in court next February.

Who does this leave? HIH chairman Geoff Cohen has largely been left alone by ASIC although he does pop up on APRA's comprehensive disqualification register, along with a range of other HIH and FAI executives.

The former auditor and chairman of the HIH board's audit committee, Justin Gardiner, is the most publicly active in business as he remains on boards such as Hutchison and Austar. Similarly, fellow director Bob Stitt QC remains active at the NSW bar, popping up representing pokies pioneer Len Ainsworth last week.

All up, the public has received a reasonable return on its $150 million-plus investment in the HIH Royal Commission and subsequent court sequels.



25. How News Corp has underperformed


By Stephen Mayne

"The reincorporation is expected to benefit all shareholders, by increasing the scope and depth of the shareholder base, improving trading liquidity, enhancing access to the capital markets and making the company's shares eligible for inclusion in a variety of US-based indices."

So said News Corporation on April 6, 2004, the day it first unveiled the controversial move to America. That prediction was a long way from being fulfilled on Friday night when the ordinary voting shares tumbled 45c to a two-year low of $19.71.

The stock has since recovered marginally but it is worth remembering they were trading at the equivalent of $24.32 on April 6 last year and the non-voting stock was at $21.82. Yesterday they closed at $19.91 and $18.80 respectively. Therefore, the voting shares have slumped 18.13% and the non-voters are down 8.75% since the move was announced amidst claims of an impending re-rating as American funds soaked up the stock once it joined the S&P 500.

It's not as if the Australian market has gone backwards over that period. On April 6, 2004, the S&P/ASX 200 was at 3452.2, so it has rocketed more than 1000 points to 4459.7 since then, a rise of 29.2%. News Corp clearly volunteered out of a booming Australian market and the faster Australian funds sold the better off they've been.

This means that News Corp voting shares have underperformed the broader Australian market by almost 50% since revealing plans to leave. What was it that Terry McCrann said on April 7, 2004?

"It's a great and exciting day for Rupert Murdoch and all the family – the culmination of one 50-year journey and the start of another. It's a huge day for all shareholders in The News Corporation. It's also an important day for Australia, for all Australians, securing one of our two key links to the dynamic growth industries of the 21st century."

We all know that News Corp is mainly an American business, but since April 6 last year the Dow Jones has risen from 10,243 to 10,440 and the broader broader S&P 500 is also up marginally from 1181 to 1207.

Given these undeniable statistics, shareholders must surely regret embracing the move. October 26 was the anniversary of the vote taking place and November 12 is the anniversary of the move formally coming into effect, so Rupert will have a lot to reflect on when he gathers before the Adelaide faithful at The Advertiser building on November 16 for what will probably be the first and last News Corp "shareholder information meeting".

This notion of returning to Adelaide each year was pushed by Lachlan Murdoch who was dead against the reincorporation, but with the heir apparent now forging his own career in Sydney, don't expect a similar gathering in 2006. And nor should Rupert bother - the Adelaide shareholders asked one question in seven years during the 1990s, so they aren't exactly passionate.

Copyright © 2024 The Mayne Report. All rights reserved

• share
  Share
  • 
    Facebook
  • 
    Twitter
  • email
    Email
  • print
    Print
  • link
    Copy Link
  • cancel
    Cancel