Besieged Trevor Rowe calls in the KGB
February 2, 2010
Dear Mayne Reporters,
greetings from the RACV Club business centre after a couple of hours searching the ASX share register at Link Market Services on the 1st floor of the salubrious 333 Collins St - the Becton-developed building that cost Tricontinental $75 million and South Australian taxpayers about $200 million in the 1990s.
Irrelevent historical references aside, it has been another big day in the ASX board and governance debate.
David Iron, a respected figure in stockbroking circles and former colleague of ASX director Russell Aboud at UBS, let fly at Risk Metrics in a letter to The AFR, attacking the world's most powerful proxy adviser for playing the man rather than the ball in recommending shareholders ditch Aboud but support fellow incumbent Trevor Rowe at the forthcoming ASX AGM on September 24.
Meanwhile, Risk Metrics boss Dean Paatsch already appears to be backing away from his position if you can believe News Ltd's Terry McCrann who let fly at the ASX in a major way today under the headline, "Undisturbed sleep at the ASX", complete with a picture of a bloke kipping. Check it out here.
McCrann's spray included the following:
RiskMetrics is exactly right. The board has shown no interest in providing leadership. The buck stops with it. If anything RiskMetrics can be criticised for going soft. There are two directors up for re-election; it's recommended a protest - 'no' - vote against only one, Russell Aboud. And only because he's first up. Its managing director Dean Paasch would probably concede it should also have recommended a vote against the re-election of Trevor Rowe.
Cynics are pointing out that the Queensland Investment Corporation, which is chaired by Trevor Rowe, is a client of Risk Metrics, although Russell Aboud is connected with JP Morgan which is said to be a far bigger bigger global client of the US-listed firm. The QIC is not a client of rival proxy adviser CGI Glass Lewis, but the firm also backed Rowe.
It is now clear that Risk Metrics should have recommended against Rowe as well and it was just unfair to target the more innocent man. I framed this whole board tilt to facilitate a powerful protest vote that would force more disclosure by the ASX, but both of the proxy advisory firms refused to embrace it.
CGI Glass Lewis recommended against me and in favour of the two incumbents which was disappointing, although it is important to consider the commentary of both of these detailed reports to institutional voters.
CGI skewers Newman over no vacancy rort
On the question of the no vacancy rort, CGI Glass Lewis was strong and attacked chairman Maurice Newman as follows:
Directors are the agents of and elected by shareholders to superintend the running of their company. Accordingly, we believe that shareholders should be able to appoint the number of directors they wish to represent their interests and that the board should, therefore, have enabled shareholders to elect all three candidates if that was their wish. Particularly having regard to the role of the ASX as regulator of other ASX listed entities, the ASX should itself exhibit the highest standards of corporate governance. We also note that the ASX board currently comprises ten persons, which does not appear to us to be overlarge. We believe that the board's shrinking of its size in the face of Mr Mayne's candidacy is not only a material breach of those standards and undemocratic but also sets a most regrettable precedent that other ASX listed entities can now with justification adopt. As current chairman and primary representative of shareholders, the outgoing Mr Newman must bear particular responsibility for this decision.
Given that this is the fourth time ASX has used this rort against me, surely that alone was enough to trigger a protest recommendation against the incumbents, or some more support for the outsider copping the rigged process
Risk Metrics was silent on this point, but gave ASX a much-deserved for failing in its governance work, as Terry McCrann so eloquently explained today.
The problem with Trevor Rowe
So why is nobody recommending against Trevor Rowe? Is he just too powerful to take on? Risk Metrics has previously humbled Telstra, News Corp, Rio Tinto and Macquarie Bank, so surely it could have taken on Rowe? The lad is certainly a master networker who also seems to have a blind spot for conflicts because he somehow chairs Queensland's sovereign fund, the QIC, whilst also sitting on the Future Fund board for the Commonwealth, giving him a hand in investing more than $110 billion of public funds.
Another big conflict was the way that QIC was the largest institutional backer of the disastrous Brisconnections float, which Rowe chairs.
Shares in this $1 float fell another 0.14c to a record low of 5.6c today after Neil Chenoweth's fascinating front page story in The AFR suggesting that Macquarie could be on the hook for an exposure of up to $500 million in the teetering tollroad play.
BrisConnections has done some serious damage to the reputation of Trevor Rowe, but you wouldn't know it based on this interview he did with the KGB team at Business Spectator this afternoon. It's a fascinating read with plenty of great detail about the infrastructure market and Rowe is certainly spruiking Brisconnections in a major way.
However, it was disappointing that neither Alan Kohler or Stephen Bartholomeusz raised the following key issues:
* Trevor Rowe is ridiculously overloaded with gigs and should step down from a couple.
* The conflicts surrounding QIC, BrisConnections, the Future Fund and the ASX.
* Whether Rowe thinks ASX has done a good job supervising the market and what he thinks about the attacks on its performance and the recommendation against Russell Aboud.
The Brisconnections float clearly should have been pulled, but Macquarie and Rowe soldiered on into a terrible market and now have egg all over their faces.
For mine, this fiasco warrants a vote against Rowe at the ASX AGM on September 24.
Finally, check out how The Financial Times covered the Risk Metrics move yesterday. A German financial daily has also been in touch so this issue is getting some international play.
That's all for now.
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.
greetings from the RACV Club business centre after a couple of hours searching the ASX share register at Link Market Services on the 1st floor of the salubrious 333 Collins St - the Becton-developed building that cost Tricontinental $75 million and South Australian taxpayers about $200 million in the 1990s.
Irrelevent historical references aside, it has been another big day in the ASX board and governance debate.
David Iron, a respected figure in stockbroking circles and former colleague of ASX director Russell Aboud at UBS, let fly at Risk Metrics in a letter to The AFR, attacking the world's most powerful proxy adviser for playing the man rather than the ball in recommending shareholders ditch Aboud but support fellow incumbent Trevor Rowe at the forthcoming ASX AGM on September 24.
Meanwhile, Risk Metrics boss Dean Paatsch already appears to be backing away from his position if you can believe News Ltd's Terry McCrann who let fly at the ASX in a major way today under the headline, "Undisturbed sleep at the ASX", complete with a picture of a bloke kipping. Check it out here.
McCrann's spray included the following:
RiskMetrics is exactly right. The board has shown no interest in providing leadership. The buck stops with it. If anything RiskMetrics can be criticised for going soft. There are two directors up for re-election; it's recommended a protest - 'no' - vote against only one, Russell Aboud. And only because he's first up. Its managing director Dean Paasch would probably concede it should also have recommended a vote against the re-election of Trevor Rowe.
Cynics are pointing out that the Queensland Investment Corporation, which is chaired by Trevor Rowe, is a client of Risk Metrics, although Russell Aboud is connected with JP Morgan which is said to be a far bigger bigger global client of the US-listed firm. The QIC is not a client of rival proxy adviser CGI Glass Lewis, but the firm also backed Rowe.
It is now clear that Risk Metrics should have recommended against Rowe as well and it was just unfair to target the more innocent man. I framed this whole board tilt to facilitate a powerful protest vote that would force more disclosure by the ASX, but both of the proxy advisory firms refused to embrace it.
CGI Glass Lewis recommended against me and in favour of the two incumbents which was disappointing, although it is important to consider the commentary of both of these detailed reports to institutional voters.
CGI skewers Newman over no vacancy rort
On the question of the no vacancy rort, CGI Glass Lewis was strong and attacked chairman Maurice Newman as follows:
Directors are the agents of and elected by shareholders to superintend the running of their company. Accordingly, we believe that shareholders should be able to appoint the number of directors they wish to represent their interests and that the board should, therefore, have enabled shareholders to elect all three candidates if that was their wish. Particularly having regard to the role of the ASX as regulator of other ASX listed entities, the ASX should itself exhibit the highest standards of corporate governance. We also note that the ASX board currently comprises ten persons, which does not appear to us to be overlarge. We believe that the board's shrinking of its size in the face of Mr Mayne's candidacy is not only a material breach of those standards and undemocratic but also sets a most regrettable precedent that other ASX listed entities can now with justification adopt. As current chairman and primary representative of shareholders, the outgoing Mr Newman must bear particular responsibility for this decision.
Given that this is the fourth time ASX has used this rort against me, surely that alone was enough to trigger a protest recommendation against the incumbents, or some more support for the outsider copping the rigged process
Risk Metrics was silent on this point, but gave ASX a much-deserved for failing in its governance work, as Terry McCrann so eloquently explained today.
The problem with Trevor Rowe
So why is nobody recommending against Trevor Rowe? Is he just too powerful to take on? Risk Metrics has previously humbled Telstra, News Corp, Rio Tinto and Macquarie Bank, so surely it could have taken on Rowe? The lad is certainly a master networker who also seems to have a blind spot for conflicts because he somehow chairs Queensland's sovereign fund, the QIC, whilst also sitting on the Future Fund board for the Commonwealth, giving him a hand in investing more than $110 billion of public funds.
Another big conflict was the way that QIC was the largest institutional backer of the disastrous Brisconnections float, which Rowe chairs.
Shares in this $1 float fell another 0.14c to a record low of 5.6c today after Neil Chenoweth's fascinating front page story in The AFR suggesting that Macquarie could be on the hook for an exposure of up to $500 million in the teetering tollroad play.
BrisConnections has done some serious damage to the reputation of Trevor Rowe, but you wouldn't know it based on this interview he did with the KGB team at Business Spectator this afternoon. It's a fascinating read with plenty of great detail about the infrastructure market and Rowe is certainly spruiking Brisconnections in a major way.
However, it was disappointing that neither Alan Kohler or Stephen Bartholomeusz raised the following key issues:
* Trevor Rowe is ridiculously overloaded with gigs and should step down from a couple.
* The conflicts surrounding QIC, BrisConnections, the Future Fund and the ASX.
* Whether Rowe thinks ASX has done a good job supervising the market and what he thinks about the attacks on its performance and the recommendation against Russell Aboud.
The Brisconnections float clearly should have been pulled, but Macquarie and Rowe soldiered on into a terrible market and now have egg all over their faces.
For mine, this fiasco warrants a vote against Rowe at the ASX AGM on September 24.
Finally, check out how The Financial Times covered the Risk Metrics move yesterday. A German financial daily has also been in touch so this issue is getting some international play.
That's all for now.
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.