Dear Mayne Reporters,

Today's edition is choc full of lively material, including a record day for corporate losses, details on the outrageous negative stock figure of $1.8 billion for Woolworths, some delusional earnings figures for Babcock & Brown Infrastructure, Rupert Murdoch's tax dodging, more fee gouging by Macquarie, audio of the biggest public spray Frank Lowy ever copped, a square up with Peter Willcox, a list of frozen funds and details on how the ASX board has joined the election rorting club.

And after this lively exchange on 702 ABC Sydney this morning there will be more of the same with Lindy Burns on 774 ABC Melbourne from 5.40pm tonight.

Click through for 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.

The earnings season reached its climax today when three different companies joined the $100 million loss club, meaning we have now notched up a record seventeen $100 million-plus losses for 2007-08, eclipsing the previous high of 15 in 2001-02.

Today's offenders were as follows:

Macquarie Communications Infrastructure Group: the highly indebted Millionaires Factory vehicle reported a bottom line loss of $103 million after taking a $649 million hit on its exchangeable interest rate swaps.

Toll Holdings: the $1.3 billion book loss triggered by the distribution of its 62.7% stake in Virgin Blue to its shareholders triggered a $951 million loss for the full year.

Valad Property Group: write-downs in goodwill on its ill-fated Scarborough acquisition in the UK sent the over-geared property group plunging to a net loss of $248 million in 2007-08.

Check out the full $100 million loss club here and then ask yourself how Babcock & Brown Infrastructure today somehow reported a net loss of only $51 million? These clowns have $8.6 billion in debt and claim to have $2.9 billion in net assets when the market values the company at just $1.51 billion. They've even announced another 2.5c distribution, when clearly they should be conserving all available cash in this credit-constrained world.

At least BBI confirmed former Queensland Treasurer David Hamill will be the permanent new chairman and that Phil Green is quitting the board, so that one new appointment will establish a clear majority of independent directors who can then complete this review of the management agreements by September 30.

The stand-out result today came from grocery duopolist Woolworths which powered ahead to a 25% profit rise of $1.63 billion.

By way of contrast, pool old Foster's, one of the biggest suppliers to Woolies, saw its profit crash by 88% to $111 million as it took the medicine and wrote down its wine assets by more than $700 million.

Woolworths became the most notorious middle man in Australia after it forced suppliers of all sizes to surrender their brands and start selling produce under the company's own Select or house brand.

Nothing better demonstrates its market power better than these two figures on the Woolworths balance sheet:

Inventories: $3.01 billion
Trade and other payables: $4.8 billion

Woolworths has become a virtual supermarket with negative stock of more than $1 billion as it forces suppliers to wait ever-longer for payment, long after the goods have actually been bought by Australian shoppers.

Dean Paatsch from proxy adviser Risk Metrics laid into the ASX on The 7.30 Report last Thursday as follows:

With Babcock & Brown Power, in order to remove the manager, investors would have to pay 25 years worth of management fees to Babcock & Brown. And that's a ridiculous scenario. In my view, the ASX should share some of the blame for not informing investors adequately about the full consequences of these management agreements. We'd like to see that changed.

The ASX has this morning released the notice of meeting for its September 24 annual meeting, which reveals I'm running for the board on a platform that all those management agreement disclosure waivers granted to Macquarie and Babcock be lifted. Full marks to the ASX for not censoring the platform, but they haven't taken the governance high ground in several other respects.

Once again, the ASX is doing the "no vacancy" rort and claiming there are three candidates for only two spots. This will make it statistically impossible to get elected as even 100% of the directed proxies in favour would not have been good enough to win in 19 of my 29 tilts.

Open proxies held by the chairman usually comprise about 10% of all votes and when you consider that the average incumbent gets 96%, it makes it impossible to get elected when the requirement is defeating one of the incumbents.

At least this will generate some contemporary ammunition to present to Canberra about why corporate voting needs to be cleaned up.

Whilst the listed infrastructure sector has been suffering a capital strike and going through tough times, at least investors can sell out and liquidate their exposure, albeit at huge capital losses with the likes of Babcock & Brown Power. The same can't be said for the myriad of unlisted investment opportunities which various promoters have deluged Australia's $1.4 trillion superannuation pool with over the past few years.

A crisis of confidence has caused an increasing number of these funds to freeze redemptions, so we've decided to track this disturbing trend through the following list:

AMP: froze withdrawals from its Capital New Zealand Property Fund in August after contagion engulfed the entire sector.

Axa: The French controlled insurance giant suspended redemptions by institutional investors from its Kiwi Mortgage Backed Bonds fund in August and has recently frozen its $1 billion Australian Property Fund.

Blackrock Australia: in August revealed that only periodic withdrawal offers would be accepted at its $600 million Combined Property Income fund. Two other Blackrock funds, Direct Property and Direct Real Estate, are also forcing clients to wait up to 18 months for redemptions.

Canterbury Mortgage Trust: a $250 million New Zealand fund which froze redemptions in July 2008.

Centro: froze redemptions on its open-ended unlisted Centro Direct Property Fund in December 2007. The fund was established in 2002 and provided investors with exposures to Australian shopping centres through CentroMCS syndicates.

Challenger: recently froze its Hybrid Property Fund.

City Pacific: froze redemptions on its $1 billion First Mortgage Fund in March 2008 after bad publicity generated a flood of requests. Distributions were also abandoned and the freeze has been extended until 12 months.

Guardian Mortgage Fund: another $200 million-plus New Zealand fund which froze redemptions in July after a run.

Macquarie Group: froze redemptions on its $1 billion Direct Property Fund in August.

MFS/Octaviar: the $700 million MFS Premium Income Fund was frozen in January 2008 after a major run.

Mirvac: on July 25, 2008, Mirvac announced a 6 month freeze on redemptions at three funds - Mirvac AQUA High Income Fund, Mirvac AQUA Enhanced Income Fund, and the Mirvac AQUA Income Fund.

Tower: closed its $242 million Mortgage Plus fund in New Zealand after a run in the first half of 2008.

Not content with being the biggest owner of poker machines in the country, the biggest owner of pubs, the largest retailer of grog and fags, and with a reputation for being tough on suppliers, Woolworths wants to sell ordinary Australians another thing they don't really want right now: more credit.

This is despite the retail giant reporting a 25.7% rise in net profit to a record $1.6 billion and lifting payments to shareholders to a high 92c a share.

Woolies had record sales in the year to June 29 of more than $47 million and profit of $1.63 billion for the 52 weeks.

But this morning saw the third story in the last few months in The AFR about how Woolies is going to be launching a credit card with HSBC. It is the second attempt to get into this area by the retailer whose previous joint venture with the Commonwealth Bank failed to live up to expectations for both groups.

Now the retailer wants to sell its customers credit, at a time when we are groaning under the biggest credit card debt in history.

David Jones is planning to launch a card with AMEX, but that is not the same as what Woolies is planning. David Jones has taken its existing store credit card that was financed by GE Money and is converting it to a co-branded card with AMEX. It might end up being used for more transactions outside DJ's stores, but at first it will merely replace the DJ's in house card.

Woolies is planning something new and so breathless was The AFR that the paper failed to mention the level of credit card debt in this country at the moment.

Woolies is launching the card in Sydney's Botanic Gardens and seeing it's a big Fairfax advertiser, will any reporter there have the guts to stand up and question whether we need it? Especially given that Roger Corbett sits on the Fairfax board.

According to Reserve Bank figures, as at the end of June we had 14.242 million credit card accounts, owing a record $44.7 billion, for an average of around $3,140 in each account.

According to The AFR article, Woolies wants to get one million cards issued over the next five years. With an average balance of more than $3,000 owing, that's more than $3 billion that Woolies wants us to run up on its cards at a time when the last thing we need is more debt.

With more than 14.2 million cards in a population of 21 million people, Woolies will have to convince people to take on an extra card, or replace an existing one. In most cases people will add the Woolies card to their existing cards, and so add debt.

If the RBA's forecasts are right, then unemployment could rise by 100,000 over the next year or so as a consequence of its attempts to slow the domestic economy and bring inflation under control.

Most of those made unemployed will have housing and credit card debt as well as debts on things like mobile phones and internet accounts.

So at a time more and more Australians will be coming under pressure in their workplaces, and from possible debt strains from the surge in interest rates this year, the country's biggest retailer will be wanting us to borrow more, via its credit card.

Sometimes you have to wonder why it is necessary. Woolies former CEO, Roger Corbett is a member of the Reserve Bank board, and should be best placed to realise that we don't want more personal debt.

But then he did make his company the biggest pub and pokie machine operator in the country, so sin and debt are of little concern to him.

Macquarie Group helped itself to a record $175 million in fees from its heavily indebted Macquarie Communications Infrastructure Group fund in 2006-07, so it was very interesting to check out today's full financials for MCIG in 2007-08 given that the stock has more than halved over the past 12 months.

Here is how the fees were explained in the latest predictably complicated accounts:

34 Related Party Disclosures (cont'd)

Responsible Entity/Manager's/Advisor's fees

Base management fees paid or payable to the Responsible Entity/Manager/Advisor were $38.4 million (2006-07: $31.3 million) during the year. The base fee is calculated as 1.50% per annum of the net investment value of MCG at the end of each quarter up to $500 million, 1.25% per annum of the net investment value of MCG at the end of each quarter from $500 million to $1 billion and 1% per annum of the net investment value of MCG at the end of each quarter over $1 billion.

Performance fees paid or payable to the Responsible Entity/Manager/Advisor were nil (2006-07: $13.5 million) during the year.

Other transactions - Year to 30 June 2008: Dealings with Macquarie Group – Transactions in relation to acquisitions and capital raisings

During the year Macquarie Group acted as one of three joint lead underwriters in relation to MCG's eurobond issuance. MCG paid
$3.15 million to Macquarie Group as underwriting fees.

During the year MCG paid Macquarie Group $207,152 as advisory fees.

During the year Arqiva reimbursed Macquarie Group $1.11 million representing out of pocket costs associated with the acquisitions and refinancing projects, including transitional services agreement fees and employee cost recharges.

During the year NGW reimbursed Macquarie Group $350,735 representing employee cost recharges.

During the year Macquarie GTP Investments LLC, an associate of MCG, paid Macquarie Group $13.35 million in
transaction advisory fees.

Gee, almost $50 million this year! What great value for us long-suffering investors.

Listen to the following crack we had former James Hardie director Peter Willcox at the building products company's AGM in Sydney last week, which was written up in this subscriber report.

Telstra chairman Donald McGauchie didn't respond on the question of whether Willcox should remain on the Telstra board whilst ASIC brings proceedings against him and all those other former Hardie directors. However, I should have pointed out that the Jackson Inquiry revealed Willcox was the James Hardie director who raised the most objections to the asbestos liability-dodging corporate restructure at the time.

That said, Willcox didn't quit the Hardie board in protest at the time and therefore remains partly responsible for what happened.

Even more responsible is former James Hardie chairman Meredith Hellicar who somehow remains on the AMP board. The former chairman of our biggest industrial killer shouldn't have anything to do with our biggest life insurer. The whole situation is just too macabre for words.

London tabloid The Sun got into potentially tricky territory yesterday when it hired a truck in Sydney sticking it up Australia's relatively poor medals performance in Beijing. Check out the News Ltd coverage of the van here.

What the report failed to mention was that The Sun is owned by News Corporation, which is led by the Melbourne-born Murdoch who surrendered his Australian citizenship in the 1980s in order to become a US citizen who could build the Fox television empire.

Whilst Rupert does come back to Adelaide each year for a shareholder information meeting, News Corp is now domiciled in Delaware and his family's stake in the company is listed on the Bermuda Stock Exchange, a move that avoided $52 million in NSW stamp duty that was payable after the 2004 move to Delaware.

Given all this, poking fun at Australia's taxpayer funded medal performance is a bit cheeky. Maybe the Rudd Government should go after Rupert for that missing stamp duty and inject it into the Australian Institute of Sport budget.

Meanwhile, check out this video to see how News Corp's appalling corporate governance and dual class share voting structure was misrepresented by the Cold War warriors at the AWB EGM last week.

We've continuing to chase companies for records of old AGM exchanges and have come across a couple of beauties from the tilt at the Westfield board in 2000.

Have a listen to Frank Lowy deflect criticism over the notorious Ken Hooper bogus campaigns scandal.

And, even better, go here for the biggest spray I've ever copped from a fellow shareholder at an AGM, which was immediately followed by the Westfield campaign speech, which could equally be applied these days to the Babcock and Macquarie model of upstreaming profits from satellites.

To his credit, Frank Lowy saw the light and internalised Westfield management in 2004.