Dear Mayne Reporters,

apologies you haven't received a full email edition since November 9 but there's been a ridiculous amount of council and AGM season activity keeping us busy. A full edition should be going out tomorrow, but this feisty update is being sent from Sydney Airport whilst the Woolworths AGM continues at Darling Harbour.

The campaign to get Woolworths out of the pokies industry took a major step forward today when chairman James Strong became so flustered that he banned any more discussion of pokies after only 6 shareholders had spoken at the meeting. Four of them were criticising Woolies for the conduct of Australia's biggest pokies empire.

Jack Tilburn opened up with Strong attempting charm and jokes but the 83 year old raver finished his first batch of question with a big spray against the pokies.

The company was clearly deluged with questions from shareholders after all 400,000 were sent the anti-pokies S249P statement put together by Senator Nick Xenophon and Paul Bendat from www.pokieact.org.

James Strong attempted to soothe shareholders with claims that everything was right in the division but this fell rather flat given he was also launching the inaugural Woolworths corporate social responsibility report.

The pokies only got a miserable few paragraphs on page 21 with no reference to Woolworths refusing to comply with the new national principles of responsible gaming as rival Wesfarmers has done.

Indeed, Strong had several rushes of blood today, one of which was claiming that Wesfarmers had "conned" people that it was somehow complying with the principles.

CEO Michael Luscombe brazenly declared that Woolies is the best operator when it comes to responsible gaming when, truth be known, it is the worst and the biggest.

I was so enraged with these statements that the prepared notes went out the window during the one and only visit to the microphone which finished up telling the board they were being misled by management, they were the worst operators, they preyed on problem gamblers and they ought to be ashamed of themselves.

The PM was quoted claiming to "hate" pokies, Tim Costello was quoted calling for a consumer boycott on Woolies and Strong eventually tried to shut down what he claimed was a "policy statement".

The question put at the end of what was definitely the biggest spray I've given a board since the Toll Holdings remuneration debate in October 2008 related to whether there were any pre-emptive rights in the joint venture arrangements with Bruce Mathieson, who it was noted is a "colourful billionaire and former Alan Bond business partner".

Strong didn't go there but effusively defended the integrity of Bruce snr, Bruce jnr and the entire Mathieson family.

Paul Bendat was next up on the pokies and gave a very measured and polite performance calling for Woolies to embrace the national principles and the draft recommendations by the Productivity Commission.

Strong thanked him for the way he presented and then handed over to Luscombe who regaled the meeting with another load of hogswash about Woolies being a leader and how seriously it takes problem gambling.

The sad reality is that Woolies does the bare minimum prescribed by the various state parliaments and refused to get ahead of the curve, like its rival Wesfarmers which has agreed to spend millions upgrading its venues and is now in negotiations with Tabcorp to exit the industry.

Given that the ALP also found pokies so odious it decided to sell its Canberra Labor Clubs earlier this year, Woolies is drawing attention to itself by getting ever deeper into the industry with what is now a staggering 12,000-plus machines across the country.

Luscombe tried to claim this was only 5% of all Australian machines, which is another distortion when you consider that Woolies adopts its brutal efficiency to see punters lose $140,418 a year on each of its Victorian machines, when the industry average is only $127,213.

Similarly, official figures revealed that Woolies ran 9 of the 12 biggest Victorian venues in the 3 years to June 2008.

As Senator Xenophon told a gaming industry conference last year: "Poker machines make half their profit from people who are addicted. People with an addition don't exercise choice."

Similarly, Tim Costello called for a Woolies boycott this year stating that: "You can't claim to be a community-focused grocery chain when on your major revenue streams contributes to crime, suicide and the destruction of families."

Woolies was certainly claiming to be great corporate citizens today at the AGM with big messages on foot prints stuck to the floor of the Convention Centre boasting about all its achievements on recycling, water conservation and the like.

James Strong asked shareholders with customer related questions to see the service desk and he listed all the traditional retailing operations whilst omitting the hotels.

What would the smiling check out chick say to the pokies addict who approached her and said: "I lost my house and marriage after punting $100,000 on your poker machines, is there any way you can improve your level of service?"

The key point to remember about the pokies is that it is not retailing, it is gambling. Woolworths is used to selling healthy affordable things you can touch, but with this dangerous product Australians are duped into losing far more than they can afford.

ABC Television's midday news gave the Woolies AGM a decent run, complete with some of my comments on the pokies which were delivered with a company spindoctor hovering just two metres away.

I got a real sense today that we're reaching a tipping point on this issue. The first 30 minutes of question time was dominated by the pokies and the company's leaders were forced to go into unprecedented detail about the specifics of their appalling operation.

History was made today with Senator Xenophon's S249P statement (see last page of notice of meeting) and the company's response was a classic big tobacco effort of denial and delay.

Indeed, remind yourself of this seminal speech by Senator Xenophon to an industry conference last year when he declared that: "You try to keep the debate going for as long as you can, then you suck every last dollar from those addicted until finally common sense prevails and you are shut down for good."

Woolies went into today's AGM vowing to stick with its booming hotels and pokies division which generated EBIT of $218 million last financial year. Right now I reckon some of the directors will be having second thoughts, especially those who claim to have a social conscience. The most obvious is Leon L'Huillier, the former CEO of Victoria's Transport Accident Commission which pioneered all those road safety campaigns that left Victoria with the safest roads in the world as measured by deaths per registered vehicles.

How someone with such a record can happily pocket director fees from the biggest pokies operator in the nation with the world's highest level of per capita gambling losses remains a mystery.

To Leon and the other Woolies non-executive directors, it is time to replace James Strong as chairman and start challenging the misleading spin you've been fed by the management team for far too long.

Denial and delay as tens of thousands of your beloved customers lose their shirts is just not something a company with such heritage and community connection should tolerate.

That's all for now.

Do ya best, Stephen Mayne

Dear Mayne Reporters,

the campaign to get Woolworths to clean up its appalling pokies operation is gathering pace after the major hit at the AGM in Sydney on November 26.

We had a special briefing session on Manningham's new gaming policy last week and, in an unrelated exercise, I've just submitted the following motion to be debated at the December 15 council meeting:

Manningham City Council calls on Woolworths and its pokies business partner Bruce Mathieson to cease involving children in the marketing of their five pokies venues in Manningham, namely The Doncaster Inn, The Shoppingtown Hotel, The Yarra Valley Country Club, The Cherry Tree Tavern and The Manningham Club.

Council notes the combined federal-state National Principles For The Conduct of Responsible Gaming state that children should not be “exposed to gambling areas within venues” and calls on Woolworths to cease promotions such as "Kids Eat Free" and "Kids Birthday Parties" at their venues whilst also ensuring that any facilities accessible by children at these venues are not in any way exposed to the sights and sounds of pokies gambling.

Photographs such as the one featured in this recent Crikey story will be discussed on the night and fingers crossed the motion gets support from the fellow councillors. Manningham has the highest proportion of Woolies pokies in the state and two of their Manningham venues which particularly use children in their marketing are in the top 10 Victorian venues with annual losses of about $17 million each.

It is amazing to think that punters lose $65 million a year playing the pokies in Manningham when our entire annual rate revenue has only passed $50 million in recent years.

We sent out this account of the Woolworths AGM on November 26 but it is also useful to sample the edited audio from the meeting. Listen to all the questions as one here or the individual questions below:

Chairman's pre-emptive comments about shareholder concerns over the pokies business
Fired up Mayne blasts the board
Fellow shareholder asking for ATM limits at pokies venues but was shut down by the chairman James Strong
Paul Bendat from PokieAct.org discussing issues about children in gaming venues and problem gambling
Paul stating why he won't be supporting the re-election of the chairman
Paul not supporting the re-election of chairman James Strong

In terms of the media coverage, it was important to get this run on the ABC TV midday news because it presumably triggered Peter Meakin, the passionate anti-gambling head of news and current affairs at Channel Seven, to give the story a big run on the 6pm news that night which was the top rating story nationally with 1.238 million viewers, although we're not sure that it ran outside of Sydney.


ABC Midday News Report about the meeting

It was also good to see Woolies chairman James Strong squirming when asked about the pokies by Ali Moore on Lateline Business that evening. He even resorted to calling us anti-pokies campaigners "warped":



Ali Moore speaks with Woolies Chairman James Strong

Finally, check out Paul Bendat's excellent pokieact.org website for more on the campaign against Woolies.

December: a big month for tilts with three campaigns against retail shaftings

December will be a big month for contested corporate elections with three major Australian companies facing board challenges after treating their retail shareholders disgracefully in capital raisings. National Australia Bank chairman Michael Chaney should be facing a big protest at the AGM on December 17 in Brisbane after completely shafting retail investors in this year's capital raising by scaling back the share purchase plan by more than 70%.

I've nominated for the NAB board campaigning for greater representation for retail investors and at least the directors published the platform in full in the notice of meeting before coming back with their own detailed arguments.

Ten Network Holdings is also facing a contest at its AGM on December 10 after doing a selective $138 million institutional placement at $1.15 a share with no share purchase plan at all for retail investors. Naturally, they've been added to this SPP shame file list. Check out the platform in Ten's notice of meeting and you'll note they have hit back strongly with their own arguments.

An AWB board tilt has also been lodged for their AGM in Melbourne on December 23 with the arguments laid out in this column for Fairfax Media. Surprisingly, the board has declined to engage at all on the issue of grain grower shareholders being shafted in the notice of meeting.

The whole idea of these board tilts is to send a message across the market that any company which does a special deal with the big end of town which dilutes retail investors will automatically cop a board tilt from the serial candidate. It was the same play that worked after the cash for comment scandal in 1999 when I declared any company paying Alan Jones or John Laws would automatically cop board tilts every year until they stopped. It didn't take long for CBA, NRMA Insurance, Qantas and Optus to all walk away from the Parrot and the Golden Tonsils.

Our flights are booked for the NAB AGM in Brisbane and the Ten Network AGM in Sydney and we'd love your proxies. Just appoint Stephen Mayne and send the form back to the company or do it online through the Computershare website. If you want to reach us beforehand, email stephen@maynereport.com.

Higgins and the electoral opportunities ahead

The Higgins by-election didn't throw up any surprises yesterday and it was probably a good decision not to contest.

At the 2007 federal election I finished fourth out of eight in Higgins with the AEC website showing the top six candidates polling the following:

Peter Costello, Liberal: 43,761 votes (53.61%)
Barbara Norman, ALP: 25,367 votes (31.08%)
Michael Wilbur-Ham, Greens: 8,777 votes (10.75%)
Stephen Mayne, Independent: 1615 votes (1.98%)
Mary Dettman, Democrats: 990 votes (1.21%)
Penny Badwell, Family First: 627 votes (0.77%)

The results so far from the yesterday's Higgins by-election have the top six as follows:

Kelly O'Dwyer, Liberal: 32,779 votes (53.95%)
Clive Hamilton, Greens: 20,168 votes (33.19%)
John Mulholland, DLP: 2280 votes (3.75%)
Fiona Patten, Australian Sex Party: 1986 votes (3.27%)
Stephen Murphy, Independent: 1007 votes (1.66%)
David Collyer, Democrats: 1397 votes (2.30%)

With the Democrat vote doubling and the Greens tripling, I might have been good for 4-6%, but that would have required a letter drop and the manning of the major booths. Besides, the preference flow wouldn't have mattered because the impressive Liberal candidate Kelly O'Dwyer held onto Peter Costello's primary vote and won comfortably.

What to do over the next 12 months?

We're getting to the pointy end of the mayoral selection process at Manningham with the annual meeting of council to be held on Tuesday night. The nine councillors are getting together informally before hand to thrash it out but the likely outcome is still unclear.

I wasn't one of the candidates last year which eventually led to 25-year-old Labor man Charles Pick securing the necessary five votes. Check out this video of Charles in action at the quite inspiring permanent raising of the Aboriginal flag at our civic offices two weeks ago.

The next 12 months will certainly throw up plenty of opportunities to contest elections, starting with tomorrow night's ballot. Having campaigned previously on the value of public mayoral selection, it would be good to try and shine at least some sunlight on this process.

Next year's federal election will also be particularly interesting, especially if it is a double dissolution and there are 12 vacancies in the Senate, requiring the lower quota of 7.2%.

The Senate is appealing in part because the Greens have endorsed the impressive Dr Richard Di Natale on top of their Victorian ticket and there is a real sense the party's time has come to break through in Victoria. Indeed, Dr Dick and I had an on-air discussion about preferences on RRR's Party's Show last night at about 1am.

A senate contest is the only major political election that I haven't experienced as a semi-professional candidate so at one level it would be good to tick that box next year and potentially also direct some preferences to influence the outcome. On the key issue of pokies, it is fair to say that Kevin Rudd hasn't done a lot yet for someone who claims to "hate" them, although the real test of that will be whether he takes up the final recommendations from the Productivity Commission when they are released in February.

In terms of the on-going pokies campaign, the other appealing opportunity next year is the November 25 Victorian state election, particularly the nearby seat of Mitcham which is occupied by the Labor gaming minister Tony Robinson on a skinny margin of just 1.2%.

All up, the next 12 months seems likely to provide a bit more focus on politics and bit less attention on shareholder activism and media work. However, it's clear you can't over-commit and run for everything so there will have to be some prioritising.

Some classic Cornwall

Former Fairfax and Crikey cartoonist Mark Cornwall has been contributing his satirical commentary to The Mayne Report since March. Here is a collection of his best cartoons and there are now also some amusing animations. Check out some of his latest offerings throughout the edition:




Questioning the Murdoch interests behind realestate.com.au

The REA Group AGM on November 25 was a relatively tame affair with your correspondent being the only shareholder asking questions.

However, we did get a result from the lobbying at last year's AGM (see full account here) with the News Corp controlled company agreeing to start paying dividends. And they sure can afford to with revenue and market leadership growing to the extent that News Corp is now more than $400 million in front with the shares powering up towards $9.

Below are the edited highlights from our nine questions, some of which were quite cheeky. The plea for the company to treasure its Manningham roots got a couple of laughs and the cheekiest effort was trying to get Rupert Murdoch's son-in-law Alasdair MacLeod to admit whether his children have started working for the empire yet. The day that happens, we can all celebrate the fourth generation of the Murdoch family finally directly coming into play.

How effectively are Fairfax competing in the market given all their corporate upheaval?
Is our relationship with real estate agents getting better?
What is our commercial relationship with News Corp?
Why didn't News Corp buy some of the 10% stake sold by the White family?
As a Manningham councillor, please treasure your roots in that Doncaster garage
Commending the board for keeping salaries below market
Why did director Sam White sell all his shares?
Has a fourth generation Murdoch started working for News Corp yet?
You directors should be paying yourselves more considering performance

Clive Peeters AGM after amazing fraud

Retailer Clive Peeters almost went to the wall after an extraordinary $20 million fraud by a payroll officer so we pursued the issue at the 2009 AGM in Melbourne on November 20.

Founder and CEO Greg Smith sounded genuine when declaring the revelation came as a complete shock but his presentation to the AGM went into excruciating detail on how the disappearing cash caused all sorts of trauma to the business such as staff cuts of more than 200, a $50 million drop in sales and even the hiring of advisers to consider selling the whole show.

Sure, it was a relief that stolen money went into recoverable residential property rather than the pokies, but the overall cash loss will still be about $5 million and the cost of disruption is far greater.

It was good to see The Age gave the scandal a thorough going over yesterday, adding considerable new information to the public record.

For me, the biggest scandal remains that Victoria Police are still yet to charge Sonya Causer when she has admitted to stealing $20 million four months ago. How long does it take our Keystone Cops to take action?

Have a listen to the edited highlights of our questions here:

Compilation of all our questions on the fraud
Why did we take so long to detect it?
Getting the auditor up to defend processes
Who is our bank and are they supportive?
Tough qestion for audit committee chief John Ries as the former ANZ director sought re-election
Are the police involved or did we do some deal?
Would we have gone broke if the $20m had gone into the casino?
Why did Rick Hart quit the day before the AGM?

Questions for Hansen Technololgy, the only Manningham-based public company

Doncaster-based Hansen Technology is a rare breed in Australia, namely a listed technology company with some international operations through its billing systems technology.

It also happens to be the only listed company based in Manningham, so we trotted along to the November 19 AGM inside their concrete monstrosity of a headquarters on Doncaster Hill and asked a few questions.

As it turns out, founder Ken Hansen and his son and managing director Andrew Hansen both live in Manningham. The family's shareholding is now worth $60 million, so they are constituents to be noted and listed on our 1400-plus Rich List.

Ken is well into his 70s and clearly slowing down, even admitting the three year term approved by shareholders at the AGM would be his last. However, Andrew comes across as a real goer and certainly gave as good as he got when I suggested the company do something with its awful headquarters and get with the program given all the development that is starting to come through on Doncaster Hill.

The building at 2 Frederick Street is actually owned by Ken personally and he did express interest in redeveloping it when we finally get a tram or train servicing Doncaster. We're funding a second study examining a tram extension from North Balwyn to Doncaster and will be pushing hard to make this a reality over the coming years. Indeed, I raised the question of the North Balwyn tram extension on RRR's Party Show early this morning with state Liberal heavy weight David Davis who could only talk about all these new bus inspectors in our council which is the only one in Melbourne with no train or tram service.

Anyway, here are the edited audio highlights from all our questions at the Hansen Technology AGM:

Any opportunities arising from break-up of Telstra?
Any opportunities to expand super offering given Cooper review?
What aren't we valuing on our balance sheet?
When are we going to develop our tired HQ on Doncaster Hill?
Have you thought about attracting some institutions onto the register?
Does founder and chairman Ken Hansen intend to stick around long and is control important?

Spicing up the Centro Properties Group AGM

After almost getting elected to the Centro Retail board last year and then falling short in the formal head hunter process as they rebuilt the board, it was liberating to attend the 2009 Centro Properties Group AGM without being inhibited by a potential directorship.

The opening question attempted to get chairman Paul Cooper to engage on the question which has triggered these ASIC proceedings against all the directors, plus an IMF class action, namely the mis-classification of more than $2 billion in short term debt in the 2007-08 accounts. Have a listen to the response here.

Former auditor PwC is in the gun and has resigned after Centro threatened to join them as a defendant. Have a listen to the auditor debate below.

The other amazing element of the Centro AGM was the way chairman Paul Cooper was re-elected for another three years with 98% in favour.

Sure, Cooper has done a good job stabilising the teetering ship, but he still was a director who approved all those crazy US expansion deals, most notably the $5 billion splurge on New Plan in 2006. Seems the market has bought Cooper's line that he was some form of whistleblower against former CEO Andrew Scott and more hero than villain.

Not everything went the way of the board as new director Anna Budels copped an inexplicable 21% protest vote when she has only been on the top table for a few months. It looked like this group of Chinese investors who are now the largest shareholder with about 12% decided to target one of the new directors as punishment after the board rejected their request for two board seats.

Similarly, the remuneration report received another big 35% protest vote this year, up from the 31% against in 2008 as you can see from our list tracking all the biggest against votes over the past 4 years..

Below are all the edited audio highlights from our contributions to the debate at the Centro Properties AGM held at Jeff's Shed on November 17:

Explain the huge swings in current debts on books over past 3 years
How much have the gouging banks ripped out in fees? Are we insured and who will pay the legal fees in this ASIC action?
Explain how you flicked PwC as auditor and hired Bruce Meehan from EY
Why don't you do a discounted share purchase plan?
Supporting the election of new director Anna Budels
Challenging the re-election of chairman Paul Cooper
Speaking in favour of Susan Oliver and querying Budels protest
Robert Tsenin is exactly the sort of director we need
Have you learnt the lessons from last year's big remuneration protest?

All questions

If that's not enough on Centro, here's all the action from last year's two AGMs:

Centro Properties Group November 28, 2008
- see Mayne report, listen to audio

Centro Retail November 27, 2008
- see Mayne report, listen to audio

Manningham recreation strategy session to blame for no Twiggy Forrest showdown

As we head towards Christmas it is clear the 2009 AGM attendance rate this year will be below 2008.

As you can see from this link to the edited audio and reports from all the AGMs we've attended in 2009, the current tally of 40 won't be sufficient to get anywhere near the record 66 notched up in 2008.

Clearly the 20 hours a week plus spent on Manningham City Council matters since late November last year had taken its toll. Indeed, there have been several examples this season of missed flights courtesy of council commitments.

For instance, the planned trip to Perth on November 19 for round two with Andrew "Twiggy" Forrest at the Fortesue Metals Group AGM was canned because we had a 5 hour session at council that night on our long-term strategy for providing recreation services and facilities in Manningham. For those who weren't with us in 2007, do check out this lively account of our first and only showdown out West with Twiggy.

Now that BHP and Rio have formally signed their proposed Pilbara joint venture, the continuing emergence of Fortescue with its Chinese shareholder and customer relationships will be a very interesting story to watch as Rio Tinto's Stern Hu remains locked up.

Putting pressure on David Coe to quit RHG

Steve Johnson and Greg Hoffman from The Intelligent Investor ran for the board of RHG, the old Rams Home Loans, at the AGM in Sydney on November 12 so we made the trip up north because they also succeeded in forcing discredited Allco founder David Coe into facing a re-election contest ahead of time.

The challengers did better than I expected as you can see from these results and David Coe certainly stepped away feeling quite bruised, especially after this story by Sue Lannin on ABC radio's PM program.

Whilst Coe himself refused to front the media and the RHG spindoctors attempted to ban recording devices, some bootleg audio has fallen off the back of a truck and you can listen to the relatively heavy combat with Coe here as he attempted to explain the decision to dump all his shares in January this year. Frankly, rather than making a personal decision to quit all his public company shareholdings, it looks like he was just cleaned out financially.

All up, it was a good and somewhat feisty debate. You can listen to all the questions and below is the edited audio:

Have you considered taking the company private?
Well done on the buy back. Will you be doing another and what about a dividend?
Are you temtped to get back into the home loan business after 2011?
What have the shareholders told you about why they protested against the remuneration report?
Why did David Coe dump all his shares and why is he running for re-election given Allco?
Stop this dubious interpretation of the proxies
Steve Johnson campaign speech

Putting Mike Fitzpatrick through his paces at Treasury Group AGM

The other reason for heading to Sydney on November 12 was the Treasury Group AGM at The Mint where chairman Mike Fitzpatrick was under pressure from a renegade former director Michael de Tocqueville who nominated for the board.

I arrived late and found myself sitting next to the challenger by accident and it turned into a heavy two hour battle with the biggest shock coming right at the end when Anton Tagliaferro from Investors Mutual got up and asked a hostile question about the strategy of buying more boutique fund managers.

Given that Treasury Group owns 47% of Investors Mutual this was most unusual and Anton was followed up by one of his staff asking Mike Fitzpatrick about an apparent conflict of interest when Treasury bought another boutique fund in which he had an interest.

The conflict was handled appropriately but given that Anton was huffing and puffing throughout the AGM it is clear there is trouble in paradise.

With no journalists bothering to attend, I ended up giving the yarn to my old flat mate Andrew White who gave it a good run in The AFR's Rear Window column the day after the AGM.

Another point of contention was the debate around Mike Fitzpatrick's personal play to win the management rights at Macquarie Airports and the Sydney Olympic stadium, which raised conflict of interest questions given his role as AFL President.

Fitzie said he offered both opportunities to Treasury but they declined to participate, which was probably a good thing given his subsequent failure to dislodge Macquarie.

The other interesting element of the Treasury debate related to the question of why Australia still doesn't have a single activist fund. Have a listen here.

You can hear all the questions and below is the broken down edited audio:

Where is the value we are not recognising on our balance sheet?
What is your long term asset realisation model?
What is the history with our Investors Mutual cross-shareholding?
Will Reuben serve a full term and does he have any interests in other boutiques?
Why hasn't Australia produced an activist fund or Treasury Group supported one?
Is there anything the challengers has suggested which you think has merit?
Can you explain the big cash bonus to Rob Sullivan?
Where are you looking to focus your energy going forward?
Trouble in paradise: the Investors Mutual intervention
How are our relations with Investors Mutual?

Silent protest at Lend Lease AGM

The visit to Sydney on November 12 was also intended to take in the Lend Lease AGM where a big remuneration protest was tipped to unfold. Any chance to blast former ABC Learning chairman David Ryan, a Lend Lease director, also ought to be taken up.

However, because the Treasury Group AGM dragged on so long and very few shareholders bothered to speak at Lend Lease, it was all wrapped up by the time I got near the City Recital Hall.

The Lend Lease remuneration report received a huge 41.4% against vote yet the debate was minimal. Have a listen here.

This was an unfortunate feature of the AGM season with the likes of Bendigo Bank, Qantas, United Group and Computershare copping big protests on pay-related issues but none of the necessary rhetorical dressing from the floor to really ram home the need for change.

Still, at least we saw far bigger protests over remuneration than on director elections where the likes of Graham Burke at Austereo and Ryan Stokes at Seven Network copped big protest votes, albeit with institutions safe in the knowledge that the controlling shareholders would ensure there was no risk of actual defeat.

The biggest scalp the proxy advisers Risk Metrics went after was Goodman Group chairman Ian Ferrier, but the support of the Chinese Government and Macquarie saw him survive an unprecedented 35% protest vote.

Remuneration report protests keep on coming

This list tracks against votes of more than 20% on remuneration reports since the non-binding vote was introduced in 2005. The biggest protests for 2009 were:

Downer EDI, 2009: 59.08% - concern the long term incentive scheme was too generous.

United Group, 2009: 49.2% - CEO Richard Leupen got a big incentive to find a successor. Listen to the remuneration debate here.

Transurban, 2009: 48% against in the poll after proxies were 69.13% against - listen to the remuneration report debate.

Aspen, 2009: 47.5%

Qantas, 2009: 42.55% - big concern over huge payout to former CEO Geoff Dixon. Listen to the debate here.

Lend Lease, 2009, 41.4% - debate was minimal.

Cabcharge, 2009: 40.35%

Computershare, 2009: 40% - concern over locked in termination payments triggered CEO Chris Morris to sledge proxy advisers.

Centro Properties, 2009: 35.51%

Bendigo and Adelaide Bank, 2009: 32.46% - listen to the remuneration debate

Babcock & Brown Infrastructure, 2009: 31.82%

Leighton Holdings, 2009: 11.5% against including Hochtief stake but 60.5% against excluding votes of the controlling shareholder due to concern over greed of CEO Wal King. Listen to the debate

Lively audio from Fairfax Media AGM

The Fairfax Media AGM was almost a month ago on November 10 but our last full edition was sent on November 9 so there's a few details still to report back on.

This story for Crikey went through the key numbers in your correspondent's public company defeat number 37, most notably the disappointing 2.95% in favour making it the third lowest result in 10 years.

However, like with many AGMs, the most important thing was the atmospherics of the debate and whilst nothing has happened yet, I'll be very surprised if fellow challenger Steve Harris isn't appointed to the board after he delivered a solid campaign speech. (see below)

My campaign speech (listen below) was a bit more off the cuff and chairman Roger Corbett talked about enjoying the "colour" it added to the AGM.

Corbett wasn't quite so comfortable as we went through his record on the pokies at Woolies and the potential conflict from the retailing giant being Fairfax Media's largest single advertiser whilst also paying the devout Anglican a $600,000-a-year consultancy until September 2011.

Former Keating government minister and Labor Senator Chris Schacht flew in from Adelaide for the Fairfax AGM and certainly generated plenty of publicity with his cutting attacks on all the boardroom in-fighting over the previous weeks.

We also had Jack Tilburn jabbing away although he was slightly less unhinged than usual and reasonably contained by Corbett's rule that you could only ask three questions on each resolution.

All up it was a good debate but disappointing to see Corbett re-elected with 98% in favour and none of the three challengers reach double figures, as if to suggest the current board has done a great job and three media professionals with a combined 70 years experience had little to offer.

You can hear all the questions as one or sample the edited debate in bite size chunks below:

Opening salvos from former Keating government minister Chris Schacht
Questions on why Fairfax missed the three big online classifieds plays
Question for the auditor on write-down of intangibles
Questions for Roger Corbett on Woolworths, pokies, conflicts and his small shareholding
Steve Harris campaign speech
Stephen Mayne campaign speech
Gerard Noonan campaign speech
Question about the remuneration report

Finally, here is a link to our past eight rounds of AGM engagement with the media giant: Fast and furious eight face-offs with Fairfax



Classic Cornwall



Donate to help keep this free service (plus pay for a few flights to AGMs)

The Mayne Report costs almost $100,000 a year to run (assuming I don't get paid a salary) and we moved to a free model in June, after struggling along seeking subscriptions for the first 21 months as we racked up almost $200,000 in losses.

However, it has been nice to receive almost $4000 worth of donations over the past four months and we're hoping this new model can help cover some of the start-up losses and ongoing operating expenses.

Thank you all for generously contributing and we've put together this honour roll for those who have donated which includes the following entries since the last edition:

November 25
Karl: donated $100

November 14
Brian: donated $30

November 13
Mark: donated $100

November 12
Ian: donated $5

November 11
Matt: donated $200

November 10
Russell: donated $20

If you fancy giving us a hand to help fund our activism and keep The Mayne Report going, just click on the image below:



Latest Manningham Council audio

Manningham City Council held a public council meeting on November 24 and the most contested item of the night related to a 40 unit retirement village development on King St. It ended up passing 7-2 and you can listen to the full debate here.

Manningham City Council also held a public council meeting on October 27. Check out the agenda and minutes. Below are links to edited audio of our contributions to the public debate.

Manningham Recreation Association nomination of community members
In favour of not supporting logging in our water catchment areas
Update to the capital works program
Satisfaction survey results were good but we should not get complacent
Review of the council allowance and support policy
In favour of a dog activity centre
Supporting the planning application for a medical centre in Eastway avenue
Supporting the 5 star Crown Plaza hotel and serviced apartments to be built on Doncaster Hill

MEO joins the SPP shame file

Melbourne-based oil and gas player MEO Australia has joined our SPP shame file and appears keen to earn themselves a contested election at next year's AGM.

The company last month completed a $27 million placement at the knockdown price of 45c, an 18% discount to the previous closing price of 54.5c in a rising market.

The stock settled at 49c the day after the placement which the company claimed was "heavily over-subscribed". Well, why on earth wouldn't you price it more aggressively if institutions were knocking you down in the rush?

Even worse, earlier suggestions of a share purchase plan to pacify retail investors have now been dropped, with the company declaring "the funds raised from the placement have satisfied immediate capital requirements".

Well why the hell didn't MEO do a smaller placement to accommodate its retail investors?

The AGM was held on November 19 but I was tied up at Hansen Technology in Doncaster so let's hope the aggrieved retail investors gave the board hell.

Mayne Report government bonds list to be more topical with Tony Abbott

This list tracks all bond and treasury note issues by the Rudd Government since it was elected in November 2007. There has now been more than $40 billion raised since the second stimulus package was unveiled on February 3 and we got a sense of the coming campaign on debt and deficit from Tony Abbott last week.

Indeed, Barnaby Joyce rattled off figures to Barrie Cassidy on Insiders this morning claiming federal debt has hit $115 billion and the states owe $170 billion. Throw in more than $100 billion of government guaranteed bank borrowings and total public sector liabilities are now north of $300 billion.

The latest federal bond issues are as follows and you'll note that interest rates are still north of the 4% assumed in the budget papers. Sky-rocketing public debt is a worry and here is the detail from Canberra's latest efforts:

Friday, December 4, 2009: $700m tender of 4 year bonds expiring in June 2014 were sold for an average yield of 5.05% and was 4.3 times over-subscribed.

Wednesday, December 2, 2009: $500m tender of 8 year bonds expiring in February 2017 were sold for an average yield of 5.17% and was 4.5 times over-subscribed.

Friday, November 27, 2009: $700m tender of 3 year bonds expiring in April 2012 were sold for an average yield of 4.59% and was 4.2 times over-subscribed.

Wednesday, November 25, 2009: $500m tender of 12 year bonds expiring in May 2021 were sold for an average yield of 5.42% and was 3.4 times over-subscribed.

Friday, November 20, 2009: $600m tender of 4 year bonds expiring in May 2013 were sold for an average yield of 4.98% and was 3.7 times over-subscribed.

Wednesday, November 18, 2009: $600m tender of 11 year bonds expiring in April 2020 were sold for an average yield of 5.55% and was 3.5 times over-subscribed.

Friday, November 13, 2009: $700m tender of 5 year bonds expiring in June 2014 were sold for an average yield of 5.38% and was 5.5 times over-subscribed.

Wednesday, November 11, 2009: $500m tender of 11 year bonds expiring in May 2021 were sold for an average yield of 5.77% and was 4.0 times over-subscribed.

The rather thin ASIC jail list

Is ASIC an effective corporate cop? You be the judge as this is the list of 346 people they have sent to jail since it was established in January 1991. There were only 19 incarcerations in 2008, and so far in 2009 we have only already reached 12, one of the lowest figures in years. So much for justice being served swiftly against all those wrong-doers exposed by the global financial crisis. Below is the only new addition since we last reported but even this one was fully suspended:

9 November 2009 - Mr Russell Collins-McBride, of Seaview Downs, Adelaide, was sentenced to six months imprisonment, fully suspended upon entering an agreement of good behaviour for three years. A former franchisee of Power Loan he pleaded guilty to carrying on a financial services business without an Australian financial services licence.

AWB and Incitec Pivot join $100 million loss club

A record 29 ASX-listed companies reported losses of more than $100 million in 2007-08. The 2008-09 season delivered unprecedented amounts of red ink, caused by the global financial crisis, with losses of more than $100 million for a record 52 companies. That's a pretty amazing statistic given that we had previously only found 75 companies that have achieved that milestone more than 150 times over the past 20 years. Check out where they all rank in this league ladder of corporate disasters, plus this chronological version.

Meanwhile, here are the two additions to the list from companies with September 30 balance dates:

AWB: heavy losses in Brazil and other write-downs caused a net a loss of $250 million for the year to September 30, 2009.

Incitec Pivot: recorded a loss of $179.9 million for the year to September 30, 2009, after hacking into goodwill associated with the $3 billion acquisition of Dyno Nobel.



The Mayne Report Rich List

BRW magazine does a great job with its various Australian Rich Lists but we've broadened their efforts to track any Australian who has ever been worth more than $10 million. We've got more than 1400 names with those who've fallen back below $10 million now italicised. Below are our latest new entries:

Sahba Abedian: manging dierector of Sunland Group and son Soheil, he has a shareholding of around 6 million which with other assets pushes his wealth north of $10 million.

Phillip Brass: the former Pacific Dunlop chief made a tidy profit from the sale of his Toorak mansion in Melbourne. The sale makes the mansion, named Miegunyah, Melbourne's most expensive house. He purchased the property for a reported $2 million in 1991 from Robert Holmes à Court and sold for $20 million to an undisclosed buyer in November 2009.

Catelan family: Ray, Dennis, Leanne, Michelle all made plenty when the property stats business RP Data went public.

Colin Day: former director and substantial shareholder in the debt chasing outfit Collection House.

Scott Jones: executive General Manager of Student Recruitment for Navitas, has a shareholding of over 2.7 million shares which pushes his wealth north of $10 million based on the share price of $4.05.

Steve McKnight: a former accountant who began his property investment foray ten years ago. Three and a half years later he owned 130 properties, had quit his day job and was earning in excess of $200 000 a year. He has also written From 0 to 130 Properties in 3.5 Years, which has sold 160 000-plus copies to date across Australia and internationally.

David Teoh : founder of TPG he sold his company to SPT for, effectively a quarter billion Australian dollars ($A150 millon in cash plus almost 40% shares in the merged TPG/SPT entity.

Rich List all time stats and helping out The Age

We only began our Rich List 18 months ago with around 300 entries. It has since grown to over 1400 names and so has its popularity with 65,734 page views and 55,999 visits over that period.

And it's good to see some of our entries getting picked up by the mainstream press. Check out this recent story in The Age about businessman Richard Rubin who was described as follows:

Rubin has quite a history. In South Africa more than 20 years ago Rubin developed the in-built hair dryers that feature in hotels around the world. A man who has led quite a life, and reportedly was a self-made millionaire by 21, bought his first Rolls-Royce at 22, a private plane at 25, and had his first heart bypass surgery at the age of 31.

That seems quite similar to these words in our Rich List entry for Rubin:

In South Africa 20 years ago he invented the in-built hairdryers and mini clothes dryers that are now in hotels around the world. He was a millionaire by 21, first Rolls Royce at 22, first jet by 25, a 737 by 30, followed by three heart attacks by 32. Wow, he really packs it in, and there seems to be a different luxury car parked outside his company headquarters every time you drive past.

We'll take it as a compliment.

More Cornwall cartoons for The Mayne Report

Former Fairfax and Crikey cartoonist Mark Cornwall has been contributing his satirical commentary to the Mayne Report since March 2009. Here is a collection of his best cartoons and there are now also some amusing animations. Check out some of his latest offerings throughout the edition:



BBI first major blip in 2009 capital raising plays

I'd previously sworn off ever putting serious money into anything called Babcock again after dropping more than $5000 on their various dog funds over the past three years, but was then suckered in when Canadian fund Brookfield took a cornerstone stake in BBI and various institutions happily stumped up $680 million as co-investors.

As Myer also demonstrated, just because institutions buy something doesn't mean it will deliver. Indeed, the $15,000 invested through the Babcock & Brown Infrastructure share purchase plan delivered a $3200 loss when we quit it last Thursday. Ouch.

Still, the gross gains for capital raising plays for the year are still holding at around $260,000, although there is also more than $100,000 in crystallised losses on the core portfolio of more than 700 stocks. Check out this complete chronological list of all capital raising plays in 2009 and at the bottom is a list of the remaining dozen or so upcoming offers.

There's also this version ranking the top 60-plus plays since January. For the latest shuffles in our ridiculously large tiny share portfolio, check out all trades in 2009 plus the full portfolio of 745 holdings worth just $56,136. The unrealised losses currently stand at $10,022 and the average holding is only worth $75, so it would hardly be worth liquidating the portfolio given the average brokerage of $20.

That said, all these holdings present a wide range of capital raising offers and it has been a good year playing the margins in a rising market. The October gain of $8901 was the lowest since February but we bounced back to make $16,800 in November as the following break down demonstrates:

January: broke even
February: broke even
March: $10,170 profit
April: $36,996 profit
May: $31,639 profit
June: $86,600 profit
July: $28,293 profit
August: $12,758 profit
September: $32,229 profit
October: $8901 profit
November: $16,800 profit
December: $3200 loss so far

Gross paper profits for year: $261,186

That looks like a big windfall, but don't forget those $100,000 in crystallised losses plus more than $40,000 in financing and under-writing costs associated with these plays.

Finally, here are the results of all capital raising plays since the last edition:

November 12
Capral: applied for $20,000 in entitlement offer at 2.5c and exited 141,000 shares at 4.3c to make a profit of $2500.

November 13
Campbell Bros: $8000 into 1-for-6 entitlement offer at $22 with extras but scaled back to virtually nothing.

November 19
Kathmandu: $30,000 into two applications for flying blind float priced at $1.70 and scaled back to 12,940 shares costing $22,000. Exited at $1.73 for gain of $300.

Po Valley Energy: $15,000 into SPP at $1.55 and exited at average $1.53 to lose about $200.

Praemium: $20,000 into two 1-for-10 entitlement offers at 15c with overs. Exited at average 16.25c for gain of $1600.

November 25
Toro Energy: $15,000 into three $5000 SPP entitlements at 15c. Exited at average 15.33c to break even considering more expensive purchase prices.

November profits: $16,800

December 3
BBI: $15,000 into SPP at $5.08 and exited at $4 to lose $3200.

Offers we're currently committed to

And here is a list of the plays we've applied for and not yet exited or been allotted:

Amalgamated Holdings: $15,000 into 1-for-5 entitlement offer at $4.10 with overs. Closed Nov 30, trades December 9.
ANZ: $20,000 into convertible prefs offer yielding 3.1% above bank bill rate. Closes December 10 and trades December 23.
AMCIL: $10,000 into $15,000 SPP at 64c which closed December 4 and trades December 11.
Clean Seas Tuna: $3000 so far into three $15,000 SPPs at 25c which closes December 18 and trades December 23.
Moly Mines: $45,000 into three $15,000 SPP entitlements at 80c with 20 million share cap after institutional and Chinese capital raising. Closed November 30 and scaled back by 48%. Trades December 7.
Penrice Soda: $14,000 into 1-for-2 entitlement offer at 70c with overs but heavy scale back. Closed November 27 and trades December 8.
St Barbara Mines: $15,000 into 3-for-14 entitlement offer at 27c. Closed December 4 and trades December 15.
Tissue Therapies: $15,000 into SPP at 15c or 20% discount to VWAP. Closed December 4 and trades December 22.

Total live applications: $137,000

All the recent share trades

Check out all the trades so far this year and here's the world's biggest small portfolio along with most of the recent trades below:

December 4
Blue Energy: bought 2,500 at 20c
Citidel Resource Group: bought 1,250 at 40c

December 3
Babcock & Brown Infrastructure: sold 2,948 at $4
Praemium: sold 2,600 at 16c

December 2
Golden Gate Petroleum: bought 14,287 at 3.5c
WAM Capital: bought 400 at $1.25

December 1
Gowing Brothers: bought 200 at $2.50

November 30
Nomad Building: bought 685 at 73c

November 27
Metgasco: bought 1,112 at 45c
Premier Investments: sold 40 at $8.46
Toro Energy: sold 35,418 at 15c
Walter Diversified: bought 313 at $1.60

November 26
Liquefied Natural Gas: bought 400 at $1.25

November 25
Toro Energy: sold 68,000 at 15.5c

November 24
Cellestis: bought 157 at $3.20

November 23
KFM Diversified: bought 589 at 84.5c
Navitas: bought 125 at $4

November 19
Katmandu: sold 6,470 at $1.73 and 6,460 at $1.72
Po Valley Energy: sold 9,700 at $1.53
Praemium: sold 69,232 at 15.9c and 66,600 at 16.5c

November 18
Wilmot Forests: sold 926 at 43c

November 17
Andean Resources: sold 240 at $2.49
Cazaly Resources: sold 1,990 at 24c
CGA Mining: sold 285 at $1.80
Clough: sold 615 at 88.5c
Dominion Mining: sold 129 at $4.05
MMC Contrarian: sold 990 at 46c
Wide Bay Australia: sold 49 at $9.18

November 13
Austin Exploration: sold 7,940 at 5.1c
Campbell Bros: sold 23 at $27.63
Capral: sold 14,543 at 4.4c
Caspian Oil and Gas: sold 26,316 at 1.3c
Macquarie Airports: sold 384 at $2.83
Marmota Energy: sold 5,603 at 14c
St Barbara Mines: bought 1,565 at 32c

November 12
Capral: sold 141,000 at 4.3c

From the press room: Crikey, Businessday, ABC radio and RRR

2009 has been another year of heavy media engagement across a wide spectrum. Indeed, after spending two hours on RRR this morning doing Headley Gritter's The Party Show with fellow guests Nick Economou and Phil Cleary, you realise it is perhaps time to be a little less engaged with the fourth estate.

Still, after more than 20 years manning the midnight until 2am shift each Sunday morning, Headley has built up a remarkable ability to land interesting guests.

Last night we had Wilson Tuckey, Richard Di Natale from the Greens and two Victorian MPs, David Davis and Carlo Carli, all on the phone as we sipped our Crown Lagers and got increasingly raucus discussing politics.

My favourite moment was calling the 74-year-old Tuckey a "reactionary dinosaur" and asking when he would finally retire from now less safe seat of O'Connor but it didn't seem to register and he just kept spouting garbage whilst promoting some climate change gumph on his website.

We'll hopefully have some audio for the next edition. Meanwhile, here are links to other media engagements from recent weeks:

774 ABC Melbourne: discussing the world of finance on Wednesday, November 25.

774 ABC Melbourne: discussing Jodee Rich's victory against ASIC on Wednesday, November 18.

Waking the sleeping giant: article for Fairfax on November 11 arguing for our superannuation system to emerge from its cave and expose itself to scrutiny.

Woolworths reeling, when will they fold on pokies?
Crikey, November 27, 2009

Mike Rann and the Channel Seven hatchet job
Crikey, November 20, 2009

James Packer and the One-Tel judgment
Crikey, November 16, 2009

Fairfax tilt: coming last and loving it
Crikey, November 11, 2009

Tilts, taunts, shaftings and media moguls
Crikey, November 10, 2009

With Roger Corbett, it's a question of character
Crikey, November 9, 2009

Click the link to get the latest radio and AGM audio


Shane Marden's Child of Tibet

On July 1, 2009, The Mayne Report's multimedia producer, Shane Marden, officially launched his coffee table book Child of Tibet - a lost innocence. Shane self-published and the Dalai Lama wrote the foreword for the book which was obtained when Shane had a private meeting with him on December 31, 1999, in northern India.

Almost 10 years to the day on December 2, 2009, Shane was able to personally hand the Dalai Lama a copy of the book in Sydney to come full circle.


Mayne Report video blog

We have added more playlists to this collection of special edition videos. Check out the new News Corp playlist and the Super ratings Conference Speech. Watch these special edition videos here.



Classic Cornwall


Mayne Report RSS Feeds

The Mayne Report now has RSS feeds for you. We have bundled our best articles into a simple and easy delivery for you. Add an RSS feed to your personal reader, iGoogle, MyYahoo, or blog. It's quick and easy to do and means you're always up to date with the latest Mayne Report activity.



Sign up for Mayne Report Tweets



We have only been twittering for a few months, but now have 937 followers and are regularly dropping out the latest developments from AGMs, capital raising plays and even Manningham Council. Sign up below to get the latest updates from all our activity and check out some of the latest tweets :

2.54pm Dec 2 Just dropped $3000 exiting BBI SPP. First big blunder of year. Ouch. Off for a coffee with the deputy mayor of Manningham.

12.40pm Nov 30 Good debate yesterday at DJs and Seek AGM. Went hardest on lack of female directors, especially with female-centric DJs which has just one.

6.39pm Nov 27 Read this hard hitting Woolies pokies story in Crikey: http://bit.ly/7Q38s0/

4.19pm Nov 27 Doing Business View on Sky News Business from 2-3pm this arvo with Dubai default risk number one story. Shares have tanked badly due to fear.

5.39pm Nov 26 Listen to this big spray over the pokies delivered at Woolies AGM yesterday: http://video.maynereport.com/audio/woolW09AGM_stephen.mp3

4.39pm Nov 26 check out all the action from today's Woolworths AGM, realestate.com.au AGM and new Mayne Report edition sent http://www.maynereport.com

5.30pm Nov 25 Regular chat on 774 ABC Melbourne discussing the world of finance http://video.maynereport.co...

That's all for now.

Finally, sorry again it has been a while between comprehensive editions and if you've got this far, feel free to shoot through some honest feedback or suggestions on how we can improve or what you'd like us to cover.

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.