AWB farmers hit jackpot, Babcock scandal and ASX update
September 5, 2008
Dear Mayne Reporters,
Australian grain growers, who collectively own about 25% of AWB, are already enjoying the fruits of their normalised governance structure as shares in the agri-business powered ahead in a falling market for the second day in a row today.
The stock is now up 17c to $3.07 since Tuesday's close, an impressive 6% gain when the All Ords has fallen by 150 points or 3% over the same period.
By jingo, 9% out-performance in two days equates to $90 million of relative value creation for this $1 billion company. Who says good governance doesn't pay? The farmers are directly $20 million better off already. So much for Jock Munro's claim yesterday that he would go broke as a result of the new structure.
AWB EGM videos
We've produced three short videos from yesterday's action, which neatly summarise the positions of all concerned:
Final spray from Cold War warriors Jock Munro and Bob Iffla
Final pathetic contributions from 4 dissident directors who refuse to resign
Highlights from chairman Brendan Stewart
The subscriber update from yesterday has also been updated.
The farmer who was most threatening and abusive outside the AWB headquarters yesterday was a wheat grower called Mark Dwyer from Rankin Springs in NSW. The same bloke is pictured on page 17 of The AFR today pointing threateningly at chairman Brendan Stewart.
Thank goodness these clowns can now disappear back to their farms, never to be heard of again in the context of governance structures on Australian capital markets.
ASX board campaign update
The ASX have made contact on the question of accessing their share register for the board tilt at the September 24 AGM and have offered up the following:
* Free inspections of share register through Link Market Services at Melbourne or Sydney offices.
* $250 for an electronic copy of the share register.
* Free inspections of the "relevent interest" register which strips away nominee shareholdings and reveals beneficial ownership and is maintained by Orient Capital, which only has a Sydney office.
* $400 for a hard copy of the relevent interest register.
They are not backing down on the refusal to release the top 200 beneficial shareholders, which is all I need for proxy solicitation, but this is much cheaper than efforts from other companies such as Fairfax Media and Macquarie Bank over the years.
Babcock & Brown Power looted, ASX under the pump
When Australia's parliament passed legislation creating compulsory superannuation in the 1980s, few would have realised the industry that would emerge to “service” what is now the world's fourth biggest pension pool at $1.4 trillion.
The funds management industry has created more millionaires than any other, but the game is now up and the looting of Babcock & Brown Power will be seen as the last straw.
We were all horrified by the huge $13.5 million management fee that a desperate Christopher Skase extracted from his teetering Qintex empire in 1989. Compare that with yesterday's extraordinary revelations on Business Spectator by Tony Boyd that Babcock & Brown looted $105.8 million in fees from Babcock & Brown Power last financial year which is almost as much as the current $113 million market capitalisation.
Alan Kohler has appropriately unloaded on Business Spectator this morning because this is a scandal of the highest order, especially given that the full management agreements remain secret.
The AFR's Chanticleer columnist Alan Jury yesterday described my current tilt for the ASX board as “redundant” because the monopoly exchange released this Guidance Note last week which will supposedly clean up the whole governance and disclosure mess surrounding various Babcock and Macquarie listed vehicles.
Kohler begged to differ this morning: “Last week the ASX issued a guidance note on external management agreements which basically wimped out of a crackdown on them.”
Given the latest Babcock revelations, rather than being “redundant” this platform published in the notice of meeting for the ASX AGM is red hot:
Mr Mayne is standing on the single issue platform that ASX rescinds waivers granted to various Babcock & Brown and Macquarie Group listed vehicles that allow them to not fully disclose their management agreements.
Management agreements for listed US funds must be released in full, yet the ASX has lowered the bar in Australia, turning our listed infrastructure sector into something akin to the Wild West.
The most sickening aspect of all this is the way the ASX board has become dominated by various old boys and directors from Babcock, Macquarie and UBS - the three finance houses which have pocketed the most cash from these opaque, Bermuda-registered, conflicts-ridden and poorly governed structures.
For instance, I'm up against Trevor Rowe at the ASX AGM on September 24, Macquarie's hand-picked chairman of BrisConnections. This highly geared tollroad vehicle debuted at $1 in July and hit 11c on Monday. So here we have a situation where Macquarie pocketed more than $100 million in fees promoting a structure where investors have dropped $350 million of the $400 million committed so far. And it's all fronted by an ASX director seeking another 3 years on the body which took Australian governance standards to the dogs.
And what about Michael Sharpe? He was chairman of Babcock & Brown's audit committee until “health reasons” triggered a retirement last month. But he's still healthy enough to continue serving on the ASX board! The ASX even had Sharpe on its special supervisory board on governance issues until he was replaced in June this year.
My bet is that Sharpe has agreed to resign from the ASX board, but he is waiting until after the AGM so that the board can do the old "no vacancy" rort which makes it statistically impossible to get elected.
Most democracies regard 50% support as enough to win, but the ASX has told shareholders I can only be elected if I beat an incumbent and no ASX incumbent has even got loss than 95% in favour. Importantly, I've just received an email back from BHP-Billiton in the last few minutes and they are not doing the "no vacancy" rort. How about that. The monopoly exchange which helps sets the rules for everyone else rorts the voting system, but the biggest company listed on that exchange plays fair.
Given Trevor Rowe's conflicts (how can he chair the QIC and sit on the Future Fund board as well?), ridiculous workload and the Brisconnections fiasco, I'm going to work hard to get him below 90%.
Finally, check out this updated package on the ASX tilt with links explaining all the key aspects.
That's all for now.
Do ya best, Stephen Mayne
Australian grain growers, who collectively own about 25% of AWB, are already enjoying the fruits of their normalised governance structure as shares in the agri-business powered ahead in a falling market for the second day in a row today.
The stock is now up 17c to $3.07 since Tuesday's close, an impressive 6% gain when the All Ords has fallen by 150 points or 3% over the same period.
By jingo, 9% out-performance in two days equates to $90 million of relative value creation for this $1 billion company. Who says good governance doesn't pay? The farmers are directly $20 million better off already. So much for Jock Munro's claim yesterday that he would go broke as a result of the new structure.
AWB EGM videos
We've produced three short videos from yesterday's action, which neatly summarise the positions of all concerned:
Final spray from Cold War warriors Jock Munro and Bob Iffla
Final pathetic contributions from 4 dissident directors who refuse to resign
Highlights from chairman Brendan Stewart
The subscriber update from yesterday has also been updated.
The farmer who was most threatening and abusive outside the AWB headquarters yesterday was a wheat grower called Mark Dwyer from Rankin Springs in NSW. The same bloke is pictured on page 17 of The AFR today pointing threateningly at chairman Brendan Stewart.
Thank goodness these clowns can now disappear back to their farms, never to be heard of again in the context of governance structures on Australian capital markets.
ASX board campaign update
The ASX have made contact on the question of accessing their share register for the board tilt at the September 24 AGM and have offered up the following:
* Free inspections of share register through Link Market Services at Melbourne or Sydney offices.
* $250 for an electronic copy of the share register.
* Free inspections of the "relevent interest" register which strips away nominee shareholdings and reveals beneficial ownership and is maintained by Orient Capital, which only has a Sydney office.
* $400 for a hard copy of the relevent interest register.
They are not backing down on the refusal to release the top 200 beneficial shareholders, which is all I need for proxy solicitation, but this is much cheaper than efforts from other companies such as Fairfax Media and Macquarie Bank over the years.
Babcock & Brown Power looted, ASX under the pump
When Australia's parliament passed legislation creating compulsory superannuation in the 1980s, few would have realised the industry that would emerge to “service” what is now the world's fourth biggest pension pool at $1.4 trillion.
The funds management industry has created more millionaires than any other, but the game is now up and the looting of Babcock & Brown Power will be seen as the last straw.
We were all horrified by the huge $13.5 million management fee that a desperate Christopher Skase extracted from his teetering Qintex empire in 1989. Compare that with yesterday's extraordinary revelations on Business Spectator by Tony Boyd that Babcock & Brown looted $105.8 million in fees from Babcock & Brown Power last financial year which is almost as much as the current $113 million market capitalisation.
Alan Kohler has appropriately unloaded on Business Spectator this morning because this is a scandal of the highest order, especially given that the full management agreements remain secret.
The AFR's Chanticleer columnist Alan Jury yesterday described my current tilt for the ASX board as “redundant” because the monopoly exchange released this Guidance Note last week which will supposedly clean up the whole governance and disclosure mess surrounding various Babcock and Macquarie listed vehicles.
Kohler begged to differ this morning: “Last week the ASX issued a guidance note on external management agreements which basically wimped out of a crackdown on them.”
Given the latest Babcock revelations, rather than being “redundant” this platform published in the notice of meeting for the ASX AGM is red hot:
Mr Mayne is standing on the single issue platform that ASX rescinds waivers granted to various Babcock & Brown and Macquarie Group listed vehicles that allow them to not fully disclose their management agreements.
Management agreements for listed US funds must be released in full, yet the ASX has lowered the bar in Australia, turning our listed infrastructure sector into something akin to the Wild West.
The most sickening aspect of all this is the way the ASX board has become dominated by various old boys and directors from Babcock, Macquarie and UBS - the three finance houses which have pocketed the most cash from these opaque, Bermuda-registered, conflicts-ridden and poorly governed structures.
For instance, I'm up against Trevor Rowe at the ASX AGM on September 24, Macquarie's hand-picked chairman of BrisConnections. This highly geared tollroad vehicle debuted at $1 in July and hit 11c on Monday. So here we have a situation where Macquarie pocketed more than $100 million in fees promoting a structure where investors have dropped $350 million of the $400 million committed so far. And it's all fronted by an ASX director seeking another 3 years on the body which took Australian governance standards to the dogs.
And what about Michael Sharpe? He was chairman of Babcock & Brown's audit committee until “health reasons” triggered a retirement last month. But he's still healthy enough to continue serving on the ASX board! The ASX even had Sharpe on its special supervisory board on governance issues until he was replaced in June this year.
My bet is that Sharpe has agreed to resign from the ASX board, but he is waiting until after the AGM so that the board can do the old "no vacancy" rort which makes it statistically impossible to get elected.
Most democracies regard 50% support as enough to win, but the ASX has told shareholders I can only be elected if I beat an incumbent and no ASX incumbent has even got loss than 95% in favour. Importantly, I've just received an email back from BHP-Billiton in the last few minutes and they are not doing the "no vacancy" rort. How about that. The monopoly exchange which helps sets the rules for everyone else rorts the voting system, but the biggest company listed on that exchange plays fair.
Given Trevor Rowe's conflicts (how can he chair the QIC and sit on the Future Fund board as well?), ridiculous workload and the Brisconnections fiasco, I'm going to work hard to get him below 90%.
Finally, check out this updated package on the ASX tilt with links explaining all the key aspects.
That's all for now.
Do ya best, Stephen Mayne