Wallis EGM push, ASX wash-up, ASIC jailing spree, AGM targets, all our trading and much more
February 2, 2010
Dear Mayne Reporters,
in this week's edition we've got a pile of lively material including the following:
* details of ten top AGMs we'll be attending this coming season;
* the wash-up from the ASX board tilt including the mystery surrounding that big abstain vote;
* a new list exploring the claimed assets of collapsed companies and naming the auditors involved;
* details on all our September share trading, including the $3000 profit on SPPs;
* a bouquet for ASIC as it possibly heads for a record jail haul in 2008;
* the amazing tale of the activist fund which lost track of its UBS stake after Lehman collapsed;
Make sure you click through to soak it all up and have a good weekend.
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.
in this week's edition we've got a pile of lively material including the following:
* details of ten top AGMs we'll be attending this coming season;
* the wash-up from the ASX board tilt including the mystery surrounding that big abstain vote;
* a new list exploring the claimed assets of collapsed companies and naming the auditors involved;
* details on all our September share trading, including the $3000 profit on SPPs;
* a bouquet for ASIC as it possibly heads for a record jail haul in 2008;
* the amazing tale of the activist fund which lost track of its UBS stake after Lehman collapsed;
Make sure you click through to soak it all up and have a good weekend.
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.
Trying to remove Stan Wallis
Firstly, check out this video we've made about Bruce Teele, Stan Wallis and the AFIC AGM exchanges as there's a commitment to take our shareholder activism tactics into new terrain by calling an EGM next year.
Teele is Australia's longest serving chairman after 42 year at AFIC and he's also facing a crisis within the Presbyterian church, having been kicked out again for leading the alleged Camberwell cult, as The Age reported this week.
Have a listen to how our proxy Shane Marden got shut down very quickly by Teele at Monday's AFIC AGM and it was a similar story at the AMCIL AGM a week earlier. Have a listen to that exchange about the Stan Wallis record at AMP.
The Age's Ian McIlwraith covered both meetings but it was disappointing he didn't really help put pressure on Wallis over the $5 billion-plus in losses he presided over at AMP. McIlwraith is a highly regarded commentator yet his AMCIL story held Teele up to be some sort of Warren Buffett, albeit as suggested by AMCIL director Paul Santamaria, and then the following week the paper told readers he leads a "cult", although that's a very emotive word.
And then McIlwraith's AFIC story included the following:
Mr Teele as usual kept the meeting's tone in his folksy, informal style - except when a proxy for annual meeting enfant terrible Stephen Mayne questioned, again, the rationale for retaining former AMP chairman Stan Wallis on the board and foreshadowed trying to call a shareholder meeting to have him removed.
Mr Mayne argues that Mr Wallis, because AMP lost millions while he was chairman, ought not to serve at AFIC. Mr Teele said the discussion was had last year, and he would not listen to it again.
Millions? It was more than $5 billion! Sometimes it is very frustrating trying to argue obvious accountability and governance points and instead getting labelled an "enfant terrible". Once again, check out this AFIC video to hear what was actually said at the three different meetings where the Stan Wallis record has been raised.
Teele is Australia's longest serving chairman after 42 year at AFIC and he's also facing a crisis within the Presbyterian church, having been kicked out again for leading the alleged Camberwell cult, as The Age reported this week.
Have a listen to how our proxy Shane Marden got shut down very quickly by Teele at Monday's AFIC AGM and it was a similar story at the AMCIL AGM a week earlier. Have a listen to that exchange about the Stan Wallis record at AMP.
The Age's Ian McIlwraith covered both meetings but it was disappointing he didn't really help put pressure on Wallis over the $5 billion-plus in losses he presided over at AMP. McIlwraith is a highly regarded commentator yet his AMCIL story held Teele up to be some sort of Warren Buffett, albeit as suggested by AMCIL director Paul Santamaria, and then the following week the paper told readers he leads a "cult", although that's a very emotive word.
And then McIlwraith's AFIC story included the following:
Mr Teele as usual kept the meeting's tone in his folksy, informal style - except when a proxy for annual meeting enfant terrible Stephen Mayne questioned, again, the rationale for retaining former AMP chairman Stan Wallis on the board and foreshadowed trying to call a shareholder meeting to have him removed.
Mr Mayne argues that Mr Wallis, because AMP lost millions while he was chairman, ought not to serve at AFIC. Mr Teele said the discussion was had last year, and he would not listen to it again.
Millions? It was more than $5 billion! Sometimes it is very frustrating trying to argue obvious accountability and governance points and instead getting labelled an "enfant terrible". Once again, check out this AFIC video to hear what was actually said at the three different meetings where the Stan Wallis record has been raised.
AGM season schedule takes shape
We've been frantically entering AGM dates into spreadsheets and now have a full picture of the schedule for October and a pretty good idea about November. Companies must give shareholders 28 days notice of an AGM so this schedule for October should be comprehensive.
In terms of meetings I'll be attending, here are 10 certainties:
Babcock & Brown Power: November 7 in Sydney
The highest priority for the season given it has destroyed billions and been looted by its parent.
Computershare: November 11 in Melbourne
Keen to have a detailed exchange on the lack of an audit trail in corporate voting.
Consolidated Media Holdings: October 28 in Melbourne
Keen to ask James Packer about Lachlan Murdoch negotiations and the solvency of PBL Media.
Crown: October 30 in Melbourne
James Packer has conveniently scheduled his AGM at Crown Casino three hours before I'm on a panel at the Financial Treasurers Association annual conference in the Crown Towers hotel. Las Vegas losses and excessive debts to be explored.
Diversified United Investments: October 15 in Melbourne
A chance to quiz ANZ chairman Charles Goode before finalising ANZ board nomination.
Fairfax Media: November 13 in Melbourne
Can't miss an opportunity to cross-examine colourful chairman Ron Walker about all these jobs cuts.
Macquarie Media: October 28 in Sydney
Am in Sydney for a union strategy session anyway and want to explore all the regional cost cutting and syndication.
JB Hi-Fi: October 14 in Melbourne
Want some answers on all these Woolworths takeover talks.
Reece Australia: October 23 in Melbourne
Have never met the private billionaire Wilson family who control this great success story, but will query Ron Pitcher chairing the audit committee with Pitcher Partners being the auditor.
Tabcorp: October 23 in Melbourne
Lots to explore with the whole Victorian pokies licence issue and the chairman John Storey also heads up the AICD.
We're drawing up schedules for possible proxies in each of Adelaide, Perth, Brisbane and Sydney so please let me know if you're available. There will hopefully be a proxy going to the Ellerston Gems EGM in Sydney at 4pm this afternoon to ask James Packer a few questions about this privatisation proposal.
In terms of meetings I'll be attending, here are 10 certainties:
Babcock & Brown Power: November 7 in Sydney
The highest priority for the season given it has destroyed billions and been looted by its parent.
Computershare: November 11 in Melbourne
Keen to have a detailed exchange on the lack of an audit trail in corporate voting.
Consolidated Media Holdings: October 28 in Melbourne
Keen to ask James Packer about Lachlan Murdoch negotiations and the solvency of PBL Media.
Crown: October 30 in Melbourne
James Packer has conveniently scheduled his AGM at Crown Casino three hours before I'm on a panel at the Financial Treasurers Association annual conference in the Crown Towers hotel. Las Vegas losses and excessive debts to be explored.
Diversified United Investments: October 15 in Melbourne
A chance to quiz ANZ chairman Charles Goode before finalising ANZ board nomination.
Fairfax Media: November 13 in Melbourne
Can't miss an opportunity to cross-examine colourful chairman Ron Walker about all these jobs cuts.
Macquarie Media: October 28 in Sydney
Am in Sydney for a union strategy session anyway and want to explore all the regional cost cutting and syndication.
JB Hi-Fi: October 14 in Melbourne
Want some answers on all these Woolworths takeover talks.
Reece Australia: October 23 in Melbourne
Have never met the private billionaire Wilson family who control this great success story, but will query Ron Pitcher chairing the audit committee with Pitcher Partners being the auditor.
Tabcorp: October 23 in Melbourne
Lots to explore with the whole Victorian pokies licence issue and the chairman John Storey also heads up the AICD.
We're drawing up schedules for possible proxies in each of Adelaide, Perth, Brisbane and Sydney so please let me know if you're available. There will hopefully be a proxy going to the Ellerston Gems EGM in Sydney at 4pm this afternoon to ask James Packer a few questions about this privatisation proposal.
Shock, horror: ASIC jails 4 people in two weeks
ASIC has been plugging away jailing a few more little known crooks. The full list from 1990 is here but the latest additions are as follows:
16 September 2008 - Mr Marcel Shears, has been resentenced in the Southport District Court to four months imprisonment after failing to complete 200 hours community service imposed in July 2007.
18 September 2008 - Mr John Tsingaris of Rosanna, Victoria, was sentenced in the Melbourne County Court to two and a half years imprisonment for offences involving the misappropriation of over $160,000 from 20 investors.
19 September 2008 - Mr Gregory Nathan, was sentenced to seven years imprisonment following an investigation by ASIC.
1 October 2008 - Mr Robin Brian Poumako, the former director of International Finance Corporation Pty Ltd was sentenced to two and half years of porridge in the South Australian District Court on 44 charges relating to raising funds from the public in breach of the Corporations Act (the Act).
Has ASIC ever jailed four people in two weeks before? Lo and behold, the corporate plod has already locked up 20 people so far in 2008, which is more than each of the last three years as you can see here. Who knows, the corporate plod might yet break its all time record of 31 in 2000.
16 September 2008 - Mr Marcel Shears, has been resentenced in the Southport District Court to four months imprisonment after failing to complete 200 hours community service imposed in July 2007.
18 September 2008 - Mr John Tsingaris of Rosanna, Victoria, was sentenced in the Melbourne County Court to two and a half years imprisonment for offences involving the misappropriation of over $160,000 from 20 investors.
19 September 2008 - Mr Gregory Nathan, was sentenced to seven years imprisonment following an investigation by ASIC.
1 October 2008 - Mr Robin Brian Poumako, the former director of International Finance Corporation Pty Ltd was sentenced to two and half years of porridge in the South Australian District Court on 44 charges relating to raising funds from the public in breach of the Corporations Act (the Act).
Has ASIC ever jailed four people in two weeks before? Lo and behold, the corporate plod has already locked up 20 people so far in 2008, which is more than each of the last three years as you can see here. Who knows, the corporate plod might yet break its all time record of 31 in 2000.
ASX AGM wash-up - tracking down the 16m abstain votes
We've packaged up all the action from the ASX AGM here.
It was interesting to watch Alan Kohler's interview with former Maurice Newman on Inside Business last week when he invoked a rather unfortuate analogy: "I mean if ASX was Iraq, the press would have invaded us by now, there are no weapons of mass destruction in this place I can assure you."
I've been trying to get to the bottom of this very big abstain vote of 16 million shares or 24% of the votes cast on my board nomination. We've tallied up all the abstain votes over the years and can only come up with a higher figure in the 2006 Woolworths tilt when it reached 33%. Check out the full list of abstain votes here.
The largest ASX shareholder is Perpetual with 5% and it confirmed that it voted against, so precisely who abstained remains a mystery. We're waiting to hear back from the other major shareholder CBA. AMP, which is the only institution known to abstain sometimes, has refused to reveal what it did.
It was interesting to watch Alan Kohler's interview with former Maurice Newman on Inside Business last week when he invoked a rather unfortuate analogy: "I mean if ASX was Iraq, the press would have invaded us by now, there are no weapons of mass destruction in this place I can assure you."
I've been trying to get to the bottom of this very big abstain vote of 16 million shares or 24% of the votes cast on my board nomination. We've tallied up all the abstain votes over the years and can only come up with a higher figure in the 2006 Woolworths tilt when it reached 33%. Check out the full list of abstain votes here.
The largest ASX shareholder is Perpetual with 5% and it confirmed that it voted against, so precisely who abstained remains a mystery. We're waiting to hear back from the other major shareholder CBA. AMP, which is the only institution known to abstain sometimes, has refused to reveal what it did.
UBS activist stalker shaken up by Lehman collapse
The Financial Times had this fascinating story on Wednesday revealing that activist fund Olivant appears to have lost control of a 2.78% stake in UBS worth $1.6 billion because it was held through failed investment bank Lehman Brothers. The key paragraphs in the story were as follows:
However, in spite of intensive discussions with Lehman and PwC, the administrators for Lehman Brothers International (Europe), it has been unable to locate the shares.
Mr Arnold said: “We're in discussion with Lehman to establish the ownership of the shares. We are doing everything we can to recover our position.”
Olivant's problems offer a rare public glimpse into the problems faced by hedge funds and other asset managers that used Lehman as a prime broker. The collapse has left funds scrambling to recover investments that were held through Lehman.
In particular, the collapse has highlighted how prime brokers can take assets, pledged by hedge funds to back loans, and use them to raise cash – a process known as rehypothecation.
Mr Arnold said: “The market is only just beginning to understand the complexity and the full implications of the first prime broker to go into administration because no one has ever thought through the consequence that that event would have.”
Mr Arnold, a former UBS executive, built the shareholding in the Swiss bank this year as part of an effort to force a shake-up in corporate governance and strategy after it suffered heavy losses as a result of the credit crisis.
Life is never easy for activist funds, but it is clearly ridiculous if the Olivant stake is somehow lost. If this sort of cascading chaos has been caused by the Lehman collapse it is clear that Hank Paulson made a major mistake in not facilitating the sale of Lehman to Barclays with a taxpayer backstop facility similar to the Bear Stearns deal with JP Morgan.
The New York Times had a cracking feature on the credit chaos reprinted in The AFR today and it was clearly the panic caused by Lehman, especially for those dealing with its London operations, that escalated the chaos two weeks ago.
However, in spite of intensive discussions with Lehman and PwC, the administrators for Lehman Brothers International (Europe), it has been unable to locate the shares.
Mr Arnold said: “We're in discussion with Lehman to establish the ownership of the shares. We are doing everything we can to recover our position.”
Olivant's problems offer a rare public glimpse into the problems faced by hedge funds and other asset managers that used Lehman as a prime broker. The collapse has left funds scrambling to recover investments that were held through Lehman.
In particular, the collapse has highlighted how prime brokers can take assets, pledged by hedge funds to back loans, and use them to raise cash – a process known as rehypothecation.
Mr Arnold said: “The market is only just beginning to understand the complexity and the full implications of the first prime broker to go into administration because no one has ever thought through the consequence that that event would have.”
Mr Arnold, a former UBS executive, built the shareholding in the Swiss bank this year as part of an effort to force a shake-up in corporate governance and strategy after it suffered heavy losses as a result of the credit crisis.
Life is never easy for activist funds, but it is clearly ridiculous if the Olivant stake is somehow lost. If this sort of cascading chaos has been caused by the Lehman collapse it is clear that Hank Paulson made a major mistake in not facilitating the sale of Lehman to Barclays with a taxpayer backstop facility similar to the Bear Stearns deal with JP Morgan.
The New York Times had a cracking feature on the credit chaos reprinted in The AFR today and it was clearly the panic caused by Lehman, especially for those dealing with its London operations, that escalated the chaos two weeks ago.
The auditors who spotted value in failed companies
The global credit crunch has partly been caused by a disclosure problem where claims about debts and capital have proved to be totally inaccurate. There is likely to be an increase in collapses caused by the global credit squeeze, so we've put together this list examining the claimed net assets of failed companies such as Pasminco, One-Tel and HIH.
It would be very interesting to know what has happened to the auditors involved, so we've named them all on the list.
It would be very interesting to know what has happened to the auditors involved, so we've named them all on the list.
Another eight new Rich Listers
The Mayne Report Rich List has attracted a healthy 24,911 page views so far in 2008 and is easily the most popular feature on our website. We're now up over 1200 names and here are the latest eight new entries.
Giannarelli family: developers of the former RAAF complex into one of Melbourne's best mixed-use properties, and former owners of Central West business park in Ashley Street, West Footscray, which was purchased recently for $137 million by the Industry Superannuation Trust.
Ron Hodge: co-founder of online managed funds business InvestSMART, which was sold to Fairfax publishing in September 2007 for a reported $12 million, but if business meet targets then a substantial earn-out will be payable.
Peter Iwaniuk: Owner of Spy Lounge, Bubble Nightclub, Centrefold Lounge, Men's Gallery and a number of other adult entertainment venues in and around Melbourne's CBD. Holds one of the largest CBD property portfolios outside of Government. His wealth is north of $10 million.
Donald Jones : the former owner of child-care recruiter 123 careers is being replaced after his company was acquired by ABC Learning Centres for $70 million. A former army lieutenant-colonel, has earned substantial amounts through providing services to ABC and now the selling of his company.
David Kowalski: co-founder of Countrycars.com.au which operates car classified advertising websites in regional markets. Fairfax recently acquired the business for a reported $5 million with much more to come in earn-out payments.
Eddie Kutner: founder and managing director of Central Equity which develops large-scale projects and a lot of inner-city apartments.
Nigel Poole: co-founder of online managed funds business InvestSMART, which was sold to Fairfax publishing in September 2007 for a reported $12 million, but if business meet targets then a much bigger earn-out will add to his wealth.
Alex Sparkes: co-founder of Countrycars.com.au which operates car classified advertising websites in regional markets. Fairfax acquired the business in May 2007 for a reported $5 million with more likely to come from earn-outs.
Giannarelli family: developers of the former RAAF complex into one of Melbourne's best mixed-use properties, and former owners of Central West business park in Ashley Street, West Footscray, which was purchased recently for $137 million by the Industry Superannuation Trust.
Ron Hodge: co-founder of online managed funds business InvestSMART, which was sold to Fairfax publishing in September 2007 for a reported $12 million, but if business meet targets then a substantial earn-out will be payable.
Peter Iwaniuk: Owner of Spy Lounge, Bubble Nightclub, Centrefold Lounge, Men's Gallery and a number of other adult entertainment venues in and around Melbourne's CBD. Holds one of the largest CBD property portfolios outside of Government. His wealth is north of $10 million.
Donald Jones : the former owner of child-care recruiter 123 careers is being replaced after his company was acquired by ABC Learning Centres for $70 million. A former army lieutenant-colonel, has earned substantial amounts through providing services to ABC and now the selling of his company.
David Kowalski: co-founder of Countrycars.com.au which operates car classified advertising websites in regional markets. Fairfax recently acquired the business for a reported $5 million with much more to come in earn-out payments.
Eddie Kutner: founder and managing director of Central Equity which develops large-scale projects and a lot of inner-city apartments.
Nigel Poole: co-founder of online managed funds business InvestSMART, which was sold to Fairfax publishing in September 2007 for a reported $12 million, but if business meet targets then a much bigger earn-out will add to his wealth.
Alex Sparkes: co-founder of Countrycars.com.au which operates car classified advertising websites in regional markets. Fairfax acquired the business in May 2007 for a reported $5 million with more likely to come from earn-outs.
Share transactions since September 1
Here is a summary of all the recent trades. There was more than $3000 in profits on share purchase plans in September thanks to Bradken and Northern Energy, but the rest of the portfolio obviously headed south and the $3000 Babcock & Brown punt was closed out with a loss of about $1000.
October 3
Amcor: bought 83 at $6.05 after realising wasn't on the register for upcoming AGM.
September 30: Added five stocks when the All Ords looked cheap below 4700
Minemakers: bought 515 at 98.5c
Templeton Global Growth Fund: bought 535 at 96.5c
Salinas Energy: bought 2500 at 20c
Saunders International: bought 950 at 54c
Hastings High Yield Fund: bought 400 at $1.25
September 26
Babcock & Brown: sold 299 at $2.34, leaving just one share and crystallising an overall loss of more than $1000 after punting $3000 when the stock was at $5 and then selling half at $4 a couple of days later.
September 25
Oz Minerals: sold 1800 at $1.80 after big recovery but still slight loss after paying $1.88
CSL Limited: sold 141 at $38 after spending $5000 on share purchase plan at $36.75.
September 23
Oz Minerals: sold 1500 at $1.665 after recovery to minimise losses after paying $1.94
September 15
Northern Energy Corporation : sold 1900 at $1.59 after profitable share purchase plan at $1.25
September 10
Northern Energy Corporation : sold 2000 at $1.53 after profitable share purchase plan at $1.25
September 8
Bradken : sold 630 at $11.04, crystallising profit of $1870 after share purchase plan at $8.05.
September 1
Ivanhoe Australia : bought 343 at $1.46 after recent float but it has tanked badly since.
October 3
Amcor: bought 83 at $6.05 after realising wasn't on the register for upcoming AGM.
September 30: Added five stocks when the All Ords looked cheap below 4700
Minemakers: bought 515 at 98.5c
Templeton Global Growth Fund: bought 535 at 96.5c
Salinas Energy: bought 2500 at 20c
Saunders International: bought 950 at 54c
Hastings High Yield Fund: bought 400 at $1.25
September 26
Babcock & Brown: sold 299 at $2.34, leaving just one share and crystallising an overall loss of more than $1000 after punting $3000 when the stock was at $5 and then selling half at $4 a couple of days later.
September 25
Oz Minerals: sold 1800 at $1.80 after big recovery but still slight loss after paying $1.88
CSL Limited: sold 141 at $38 after spending $5000 on share purchase plan at $36.75.
September 23
Oz Minerals: sold 1500 at $1.665 after recovery to minimise losses after paying $1.94
September 15
Northern Energy Corporation : sold 1900 at $1.59 after profitable share purchase plan at $1.25
September 10
Northern Energy Corporation : sold 2000 at $1.53 after profitable share purchase plan at $1.25
September 8
Bradken : sold 630 at $11.04, crystallising profit of $1870 after share purchase plan at $8.05.
September 1
Ivanhoe Australia : bought 343 at $1.46 after recent float but it has tanked badly since.
Busiest days for dividend credits and the postman
The peak of the dividend payment season was reached on Wednesday when the following 15 credits landed in the account:
IWI $2.10
Austock Group: $2.39
Aristocrat Leisure: $2.80
Macarthur Coal $2.80
Leighton holdings $3.40
IRESS $4.80
EHL Holdings $7.75
HAP $7.91
SGN $8.64
Futuris Corp $10.60
WA News $11.20
DTL $19.88
Santos $20.01
Capral $25.07
IWI $44.00
And with shares in 735 companies, the PO Box has been full every day this week with dividend confirmation forms, notices of meetings for AGM and annual reports. There will be no shortage of weekend reading.
That's all for now.
Do ya best, Stephen Mayne
IWI $2.10
Austock Group: $2.39
Aristocrat Leisure: $2.80
Macarthur Coal $2.80
Leighton holdings $3.40
IRESS $4.80
EHL Holdings $7.75
HAP $7.91
SGN $8.64
Futuris Corp $10.60
WA News $11.20
DTL $19.88
Santos $20.01
Capral $25.07
IWI $44.00
And with shares in 735 companies, the PO Box has been full every day this week with dividend confirmation forms, notices of meetings for AGM and annual reports. There will be no shortage of weekend reading.
That's all for now.
Do ya best, Stephen Mayne