Delusional ASX attacks press and imperils franchise
February 2, 2010
Dear Mayne Reporters,
after flying down from Coolangatta on a Virgin Blue flight with ABC Learning CEO Eddie Groves, it was all systems go for the ASX Ltd AGM at 11am on September 24.
I went to bed exhausted thinking that the ASX AGM had been a belter in terms of debate and disclosure but a very disappointing election outcome. It was only after reading Terry McCrann's column today that it became apparent chairman Maurice Newman had deliberately withheld the "abstain" votes from the AGM slides he presented yesterday.
McCrann points out that the 25% protest on my election was substantial, as you can see from the full results. Sure, only 3.06 million voted in favour, but the abstain vote was 16 million and the against vote 57.57 million, 4.53 million of which were undirected proxies largely held by the chairman.
The official result is just 5.05% in favour, which is the worst of my four ASX tilts and the sixth worst result in 30 public company board tilts. But this was also the highest ever percentage abstain vote, so clearly several major shareholders lodged a quasi protest against the board.
Maurice Newman lets fly
The ASX AGM became an extraordinary affair when outgoing chairman Maurice Newman let rip with a savage attack on the press for recent coverage of the monopoly exchange's performance as market supervisor. Read the delusional speech for yourself here.
And didn't it blow up in his face when you examine today's media coverage. What on earth did he think would happen. This bloke hasn't got a clue about PR.
Whilst hearing the chairman of the ABC blasting business journalists across the board was remarkable enough, the most staggering aspect was that the speech ignored the widespread criticism of ASX by the likes of QBE Insurance chairman John Cloney, Commonwealth Bank CEO Ralph Norris and the two institutional advisers Risk Metrics and Regnan.
I was so stunned by this belligerent shoot the messenger approach that I asked Maurice if the text of the speech had been formally approved by the board and whether new chairman David Gonski endorsed the comments. They did.
Gonski duly stepped up and took ownership of the position, meaning that ASX is now on a major collision course with its growing number of critics as it completely dismisses all criticism of its performance.
Limited protest in board elections
ASX will be pleased with the director election outcome as the protest vote recommended by Risk Metrics against incumbent Russell Aboud was contained to 10%.
Whilst this is the biggest protest against an ASX director since it demutualised in 1998, Risk Metrics would have been hoping for more. However, Risk Metrics boss Dean Paatsch went on Inside Business last night and is clearly not backing down for a moment.
The protest against the other incumbent Trevor Rowe, who would have been the better target, was only 2%, suggesting that ASX shareholders don't give a stuff about his ridiculous workload, various conflicts of interest and the 95% slump in the BrisConnections share price since it listed a few weeks ago.
Whilst the voting results were disappointing, it was the extraordinary public debate at the AGM which will resonate into the future as various stakeholders contemplate governance reforms and the roll of the ASX into the future.
Michael Sharpe's health and conflicts
If former Babcock & Brown audit committee chairman Michael Sharpe had been up for election, the protest would have been much larger.
However, we extracted some interesting disclosures from Sharpe, which were picked up by Rebecca Urban in The Australian.
Asked why he was too unwell to serve on the Babcock board but could keep serving ASX, he said the travel and stress from the Babcock implosion had become all too much. Have a listen to the audio exchange.
I also asked whether Sharpe was involved in the decision to replace auditor KPMG with PwC, given that he is a former partner who retained an office at PwC. Sharpe is chairman of the ASX audit committee but it was Rick Holliday-Smith who answered the question. He explained that a sub-committee of the audit committee examined the potential conflict and concluded that there wasn't one but then, paradoxically, still excluded Sharpe from the decision-making process.
Newman showed how clueless he was on the whole issue by suggesting that Sharpe had surrendered his PwC office a few years ago, prompting Sharpe to correct him and say it was only last year. This was presumably after I raised concerns at last year's Babcock & Brown AGM where Sharpe also chaired the audit committee and where PwC also picked up a stack of audit work from the broader Babcock family.
All the audio highlights
Here is the complete edited rundown of the key audio exchanges. The Gonski tax stuff is a highlight, as is the debate with Eric Mayne which demonstrates how out of touch with investors ASX has become. Even the opening joust demonstrates how surly Newman was yesterday. These sounds bites will resonate for a while, so take the time to have a listen.
Opening battle over supervisory failures as chairman tries to delay debate
Revealed: already two Opes claims on $100m guarantee fund
Campaign speech complete with shareholder heckling
Trevor Rowe on conflicts, workload and BrisConnections
Revealing how Michael Sharpe's PwC office kept him off the audit selection committee
Michael Sharpe explains how his poor health at Babcock is fine at ASX
Nailing newman for blaming the press and jousting with Eric Mayne over Babcock disclosures
Is ASIC's Tony D'Aloisio getting square after ASX sacking?
David Gonski fails to explain his Frank Lowy tax advisory role
Gonski thanks Newman when he should have been blasting him
Full audio
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.
after flying down from Coolangatta on a Virgin Blue flight with ABC Learning CEO Eddie Groves, it was all systems go for the ASX Ltd AGM at 11am on September 24.
I went to bed exhausted thinking that the ASX AGM had been a belter in terms of debate and disclosure but a very disappointing election outcome. It was only after reading Terry McCrann's column today that it became apparent chairman Maurice Newman had deliberately withheld the "abstain" votes from the AGM slides he presented yesterday.
McCrann points out that the 25% protest on my election was substantial, as you can see from the full results. Sure, only 3.06 million voted in favour, but the abstain vote was 16 million and the against vote 57.57 million, 4.53 million of which were undirected proxies largely held by the chairman.
The official result is just 5.05% in favour, which is the worst of my four ASX tilts and the sixth worst result in 30 public company board tilts. But this was also the highest ever percentage abstain vote, so clearly several major shareholders lodged a quasi protest against the board.
Maurice Newman lets fly
The ASX AGM became an extraordinary affair when outgoing chairman Maurice Newman let rip with a savage attack on the press for recent coverage of the monopoly exchange's performance as market supervisor. Read the delusional speech for yourself here.
And didn't it blow up in his face when you examine today's media coverage. What on earth did he think would happen. This bloke hasn't got a clue about PR.
Whilst hearing the chairman of the ABC blasting business journalists across the board was remarkable enough, the most staggering aspect was that the speech ignored the widespread criticism of ASX by the likes of QBE Insurance chairman John Cloney, Commonwealth Bank CEO Ralph Norris and the two institutional advisers Risk Metrics and Regnan.
I was so stunned by this belligerent shoot the messenger approach that I asked Maurice if the text of the speech had been formally approved by the board and whether new chairman David Gonski endorsed the comments. They did.
Gonski duly stepped up and took ownership of the position, meaning that ASX is now on a major collision course with its growing number of critics as it completely dismisses all criticism of its performance.
Limited protest in board elections
ASX will be pleased with the director election outcome as the protest vote recommended by Risk Metrics against incumbent Russell Aboud was contained to 10%.
Whilst this is the biggest protest against an ASX director since it demutualised in 1998, Risk Metrics would have been hoping for more. However, Risk Metrics boss Dean Paatsch went on Inside Business last night and is clearly not backing down for a moment.
The protest against the other incumbent Trevor Rowe, who would have been the better target, was only 2%, suggesting that ASX shareholders don't give a stuff about his ridiculous workload, various conflicts of interest and the 95% slump in the BrisConnections share price since it listed a few weeks ago.
Whilst the voting results were disappointing, it was the extraordinary public debate at the AGM which will resonate into the future as various stakeholders contemplate governance reforms and the roll of the ASX into the future.
Michael Sharpe's health and conflicts
If former Babcock & Brown audit committee chairman Michael Sharpe had been up for election, the protest would have been much larger.
However, we extracted some interesting disclosures from Sharpe, which were picked up by Rebecca Urban in The Australian.
Asked why he was too unwell to serve on the Babcock board but could keep serving ASX, he said the travel and stress from the Babcock implosion had become all too much. Have a listen to the audio exchange.
I also asked whether Sharpe was involved in the decision to replace auditor KPMG with PwC, given that he is a former partner who retained an office at PwC. Sharpe is chairman of the ASX audit committee but it was Rick Holliday-Smith who answered the question. He explained that a sub-committee of the audit committee examined the potential conflict and concluded that there wasn't one but then, paradoxically, still excluded Sharpe from the decision-making process.
Newman showed how clueless he was on the whole issue by suggesting that Sharpe had surrendered his PwC office a few years ago, prompting Sharpe to correct him and say it was only last year. This was presumably after I raised concerns at last year's Babcock & Brown AGM where Sharpe also chaired the audit committee and where PwC also picked up a stack of audit work from the broader Babcock family.
All the audio highlights
Here is the complete edited rundown of the key audio exchanges. The Gonski tax stuff is a highlight, as is the debate with Eric Mayne which demonstrates how out of touch with investors ASX has become. Even the opening joust demonstrates how surly Newman was yesterday. These sounds bites will resonate for a while, so take the time to have a listen.
Opening battle over supervisory failures as chairman tries to delay debate
Revealed: already two Opes claims on $100m guarantee fund
Campaign speech complete with shareholder heckling
Trevor Rowe on conflicts, workload and BrisConnections
Revealing how Michael Sharpe's PwC office kept him off the audit selection committee
Michael Sharpe explains how his poor health at Babcock is fine at ASX
Nailing newman for blaming the press and jousting with Eric Mayne over Babcock disclosures
Is ASIC's Tony D'Aloisio getting square after ASX sacking?
David Gonski fails to explain his Frank Lowy tax advisory role
Gonski thanks Newman when he should have been blasting him
Full audio
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.