Foreign ownership, RACV election, Melbourne's decline, female directors, pokies, Manningham, ASA, News Corp, Woolies, AWU saga, Hoser, speeches, Rich List and Tweets
September 23, 2011
Dear Readers,
Welcome to this special edition on Australia's foreign ownership problems in light of the Foster's takeover, plus some others item on News Corp, the RACV contested elections, pokies, Manningham, female directors, Woolies, pokies and snake catchers.
Some home truths about foreign ownership and Australia's corporate performance
The proposed $12.3 billion takeover of Foster's by SAB-Miller has sparked a flood of media discussion which may yet turn into a game changer in the broader political debate.
Wearing an Australian Shareholders' Association hat, I was quoted as follows in this story on 7.30 last night:
Sad day for Australia. Our foreign ownership record gets even worse from a very bad level already.
There aren't even 70 Australian companies that generate more than $200 million a year in revenue offshore, and now there's one less with Foster's disappearing and there just aren't enough successful Australian international companies.
A magnificent beer business in Australia, well-managed in Australia, great cash flows, great distribution, great brands, and for years the management have used that cash to stuff things up in wine, starting a finance company, going offshore. They've lost between $5 and $10 billion, squandering the magnificent cash thrown off by a majority position in the Australian beer market.
Coopers and the other micro-breweries will be a beneficiary from this perceived concern about foreign domination of beer in a country like Australia. But because the big brewers dominate distribution, it is still quite difficult logistically to break into the market, and you've also got the problem of the absolute dominance of Woolworths in liquor like no other country in the world, and even SAB Miller will find that difficult, because Foster's and Woolies have been at war for the last few months.
An even sadder day for Melbourne
Way back in 1992 at the peak of Paul Keating's recession we had to have and with Victoria copping "bleak city" sledges from up north, I attended a breakfast with then Victorian Labor Treasurer Tony Sheehan and then NAB CEO Don Argus.
Argus was trying to be upbeat and stressed that Melbourne was home to 8 of Australia's 10 most valuable listed companies. Fast forward 19 years and this is how the top 30 will look once you strip out Foster's and Coal & Allied assuming both takeovers go through.
1. BHP-Billiton, resources, Melbourne
2. Commonwealth Bank, financial services, Sydney
3. Westpac, financial services, Sydney
4. ANZ, financial services, Mebourne
5. NAB, financial services, Melbourne
6. News Corp, media, New York
7. Telstra, communications, Melbourne
8. Wesfamers, retail and diversified, Perth
9. Rio Tinto, resources, London
10. Woolworths, retailing, Sydney
11. Newcrest, mining, Melbourne
12. Woodside, petroleum, Perth
13. Fortescue Metals, iron-ore, Perth
14. Westfield, shopping centres, Sydney
15. Origin Energy, energy utility, Sydney
16. CSL, pharmaceuticals, Melbourne
17. QBE, insurance, Sydney
18. AMP, financial services, Sydney
19. Suncorp, financial services, Brisbane
20. Santos, energy, Adelaide
21. Brambles, industrial services, Sydney
22. Orica, chemicals, Melbourne
23. Coca Cola Amatil, beverages, Sydney
24. Amcor, packaging, Melbourne
25. QR National, rail, Brisbane
26. Macquarie Group, financial services, Sydney
27. Transurban, tollroads, Melbourne
28. Stockland, property, Sydney
29. AGL, energy utility, Sydney
30. Insurance Australia Group, insurance, Sydney
From 8 of the top 10, Melbourne has declined to just 9 of the top 30. The departing players over the past 20 years have included Pacific Dunlop, BTR Nylex, North, Coles Myer, CRA, Woodside, Colonial and even Mayne Nickless. To now lose Foster's is a big blow.
Where are all the mining stocks?
The above list tells a range of other stories above and behind Melbourne's relative decline as a corporate centre in Australia.
Firstly, why aren't there more resources stocks in the country with the best dowry on earth? It's simple: the vast majority of our $1 trillion-plus worth of resources assets are foreign owned, which denies Australians a large direct exposure to the biggest mining boom in history through their compulsory superannuation.
Why so many financial services giants?
The second startling fact is the dominance of financial services companies. No other country has banks as 4 of its 5 most most valuable listed companies. This reflects the cartel like dominance of the Big Four who deliver the world's most expensive banking service to long-suffering Australians. No wonder the Bendigo Community Bank model continues to go from strength to strength.
It also reflects the enormous churning gravy train created by compulsory superannuation whereby Australian's have happily tripled their collective home loan exposure to more than $1 trillion over the past decade because they believe compulsory superannuation will look after their retirement. Alas, the Baby Boomers have lived decadent lives with insufficient overall savings and have a rude shock ahead of them when they consider the aged care services they will be able to purchase. It will be magnified if Australia's housing bubble ever really bursts, especially given those large mortgages carried by middle Australia.
Australia is the only country in the world which allows the same financial conglomerates to dominate the field in allocating debt and equity through the economy, even though their are obvious conflicts involved, especially in workout situations. Who can forget the Commonwealth Bank simultaneously having a $1 billion-plus debt exposure to Centro whilst its superannuation clients dropped more than $500 million as the largest investor on the equity side.
It is not healthy for the econony to have so many financial giants dominating the ASX and it certainly hasn't helped create a culture of shareholder pressure because banking conglomerates rarely vote against poorly performing directors as they fear losing business from the company involved.
Updating the comprehensive foreign ownership lists
The Mayne Report has long produced lists which track foreign ownership in Australia and we've spent some time updating them today.
Our main contention is that Australia does not nurture or celebrate enough international success stories in business. Whilst there is nothing wrong with foreign investment, our business leaders have squandered the world's best dowry or natural assets and we are now one of the most foreign-owned first world economies on earth.
The key lists are as follows:
Australian companies which stuffed up expanding offshore
The 300 foreign companies which dominate Australian business
The miserable 70 Australian companies who generate $200m-plus offshore
Far too many of Australia's so-called success stories are local service sector oligopolies. Where are the export earnings, apart from ripping off the Kiwis. Look no further than the Big Four banks, Wesfarmers and Woolworths.
Woolworths has fatter profit margins than any other grocery retailer in the world. It's called abusing excessive market power.
After Wesfarmers bought Coles they decided to emulate the brutal Woolworths model of taking over supplier brand equity with home brands and screwing them on price.
It has worked in spades for Ian Mcloud, the Englishman imported to turn Coles into Woolworths, as he pocketed a tidy $15 million in 2010-11.
Whilst efficient logistics and well capitalised banks are vital for any economy, big banks and supermarket chains are meant to facilitate everyone else in business, not soak up so much of the value chain that they dominate the market capitalisation league ladders on the ASX.
A small number of international success stories
Without wishing to be too negative, here are my top five Australian international success stories:
1. CSL: transformed a government monopoly in blood products into the world's second biggest plasma company whilst making shareholders a fortune along the way. A perfect example of how the national champion model should work, but it's a shame the supermarket duopoly and our Big Four banks haven't followed suit, instead preferring to stay domestically focused abusing their local dominance.
2. Cochlear: hi-tech manufacturing and Melbourne technology which created a world leading hearing product which has done a stack of social good and delivered in spades for shareholders. If only there were more like it.
3. Computershare: seized on the natual advantage of Australia being a great shareholding country courtesy of demutualisation, privatisation and compulsory super. Overlayed this with great technology and consolidated the sleepy accounting firms out of the share registry business before taking the model to the world and becoming the world's biggest share registry company whilst delivering superbly over the long term for investors. And founder Chris Morris is a Manningham boy (Templestowe, like me, to be precise) whose parents both sadly passed away in a nearby nursing home over the past year.
4. Westfield: the best thing that ever happened to Australian business was taking more Jewish refugees and immigrants after the second world war in per capita terms than any other country in the world. It delivered a generation of successful entrepreneurs and Frank Lowy was the best of them, rolling out his pioneering mega-malls model to the English speaking world. We love him in Manningham as Doncaster was his first acquisition outside of Sydney in 1969 and he's now turned it into the best shopping centre in Victoria after a stunning $600 million redevelopment shortly before the GFC hit. Whilst the returns to shareholders have stalled since the three way Westfield merger of 2004, Frank Lowy has still created the world's biggest shopping centre empire and anyone who has been on board for more than a decade has done extremely well.
5. News Corp: has underperformed financially for the past 15 years courtesy of crazy deals such as Myspace, Dow Jones and selling DirecTV for a song, but businesses such as BSkyB and Fox News have still been phenomenally successful and anyone who bought News Corp between 1953 and 1980 has still done very well. Rupert may lack a moral compass, but you've still got to take your hat off to a bloke who was born in Melbourne and remains the leader of the most powerful family in the world right now.
RACV elections - support the successful incumbents
Whilst Melbourne continues to lose prominence and head quarters courtesy of foreign buy-ups and the long-term drift to Sydney and Perth, it is good to know that it is still home to Australia's biggest remaining mutual.
My better half, Paula Piccinini, was popularly elected to the board of the RACV in 2006 and over the past 5 years has been very impressed with the cohesion of the board and management team, along with the overall performance. And this is not just because RACV has five female directors.
It's hard to argue with a $500 million investment program building and acquiring one of Australia's best resort networks. The decision to build the $200 million City Club at 501 Bourke Street was an inspired move by the directors shortly after another inspired decision in 1999: forming an insurance joint venture with Insurance Australia Group. Click here to see what Steven Batholomeusz wrote about that at the time.
Over the past three years alone, RACV has rebuilt its Healesville country club, built a greenfields resort at Inverloch, picked up magnificent assets on the Gold Coast and Noosa from distressed sellers and is now embarking on an $80 million spend at the Torquay Golf Club.
The 2010-11 annual report is out and RACV reported a net after-tax profit of $58.2 million, which was largely delivered by the $82 million dividend from the insurance joint venture with IAG. It remains debt free with $60 million in cash and a solid investment portfolio over and above the resort assets and the 30% stake in Insurance Manufacturers Australia.
What I've liked about RACV, watching from the perspective of being a director hand bag, is the way they've used the compulsory retirement age of 72 to build an even stronger board with a good mix of community and commercial skills. Geographic, gender, age, cultural and skills diversity is important for a board and in my view RACV has a really good mix.
For instance, one of the directors up for election in the current ballot is John Slattery, who was managing partner of legal firm Corrs. Every board needs a tough commercial lawyer who has been around the block.
The other incumbent is Suzanna Sheed, who runs her own family law legal practice in Shepparton and absolutely flogged me and Paula in the 2005 elections. Suzanna has a really good fix on regional and community issues, plus a strong legal mind.
Anyway, here is the spiel from John Slattery and Suzanna Sheed who will certainly be getting our votes and we hopes yours too:
John Slattery and Suzanna Sheed, current RACV Directors, are standing for re-election in the 2011 RACV Board election. Voting papers have been distributed by direct mail and in the October RoyalAuto. Voting is open to both Service and Club members.
We seek your support by voting for both Suzanna and John. You will see from the ballot paper that there are six candidates, and only two vacancies to be filled.
We believe that a vote for the current directors is a vote for a successful and experienced team which works well together, and has an impressive track record of achievements.
Please forward this email with your recommendation to your family, friends and other contacts who may be interested.
RECENT ACHIEVEMENTS OF CURRENT RACV DIRECTORS INCLUDE:
· voluntary payments to 300 members who were victims of the January 2011 Victorian floods and whose RACV policies did not have flood cover;
· a program of investing in RACV resorts, to enhance member benefits through continued improvement to the quality of resorts, and the experience of members and their families;
· advocating to exclude petrol from the carbon tax; and
· ongoing lobbying of government to improve the quality of roads for all users, to reduce road congestion, and to improve public transport options throughout Victoria.
WE ARE COMMITTED TO:
· continuing to improve member benefits by improving facilities at resorts and the Show Your Card and Save Program;
· improving the safety of roads throughout Victoria for motorists, motor cyclists and cyclists and in particular supporting the elderly, and newly licensed drivers/riders;
· ensuring the progress of major rural road projects, including the completion of duplication of key highways, such as Stawell to Ballarat, Geelong to Colac and Traralgon to Sale, and to by-pass key regional hubs including Shepparton; and
· delivering benefits to members and their communities through activities, advice, representation and assistance across the range of RACV fields of motoring, mobility, leisure, assurance, financial services, social well-being and the home.
Thank you for your support.
John Slattery and Suzanna Sheed
* Authorised by John Slattery and Suzanna Sheed
See more details on the election on the RACV website.
Regime change at Woolworths - will the new guard give ground on the pokies?
Grant O'Brien formally takes over from Michael Luscombe as CEO of Woolworths on September 30.
The transition coincides with another important change at Australia's biggest retailer because on Friday week pokies billionaire Bruce Mathieson will also step back as CEO of the ALH pubs operation and will instead be a not-so-humble non-executive director.
Whilst it was the supposedly devout Anglican Roger Corbett who took Woolies into its notorious joint venture with Alan Bond's former business partner, Luscombe was an enthusiastic adopter.
The selection of a clean cut Tasmanian accountant to succeed Luscombe could yet be a game changer. Grant O'Brien's first major speech was to the big Australian Local Government Association national conference in Canberra in June.
In front of a record 800 delegates, he talked about all the great things that Woolies does in the community but then wasn't available to answer the question I intended to ask about the enormous social damage being caused by "the fresh food people" also turning themselves into Australia's biggest pokies operation with more than 12,000 machines across Australia.
Manningham also hasn't enjoyed having to spend a big six figure sum fighting an aggressive Woolworths action in the Victorian Supreme Court which is attempting to stop us from dealing with our own land to facilitate a supermarket development at Jackson Court in East Doncaster after Woolies converted its own supermarket into a giant Dan Murphy's grog shop.
Click here to see some of the relevent court documents.
How to deal with a Daily Telegraph pokies beat up
Meanwhile, it was great to see Paul Bendat, Nick Xenophon and Andrew Wilkie all team up to demolish a disgraceful beat-up by Andrew Clennell of The Daily Telegraph in relation to pokies reform, which opened up as follows:
Senator Xenophon and Andrew Wilkie then did a joint media effort and it all culminated in Media Watch highlighting Clennell's story as an example of gross media distortion at the end of this long piece broadcast on Monday night about the forthcoming media inquiry. It was watched by 590,000 people across Australia.
All this was good potent stuff and an example of how outrageous distortions by vested interests such as Clubs NSW should be tackled.
Finally, check out the latest from Paul Bendat's Pokieact website and this package of our past pokies coverage.
And try watching this 30 second anti-pokies ad made by Paul Bendat a couple of years back featuring our daughter Alice, who was 6 at the time:
Lunch with two independent News Corp directors
The Australian Shareholders' Association usually has good access to boards and directors of Australian listed companies.
Whilst the odd recalcitrant such as CSR or Qantas chairman Leigh Clifford occasionally put up the shutters and decline to engage, good on News Corp directors Sir Rod Eddington and Peter Barnes for agreeing to meet me for lunch in Melbourne next Wednesday.
As the ASA News Corp monitor, I'll be approaching the lunch following the normal diplomatic custom that either party is free to discuss the position they put at the meeting. Mine was laid out comprehensively in this 1600 word piece which appeared on The Age and SMH business website last week.
However, neither party should disclose anything about the response to their positions unless given authority by the other party.
In other words, I won't be reporting anything specific about what Sir Rod or Peter Barnes say at the meeting unless they authorise it, which is probably quite unlikely.
Meanwhile, here are the latest links to our coverage of the Murdoch governance scandal over the past eight weeks:
Inside the News Corp governance campaign
Fairfax's Businessday.com.au, Thursday, September 15, 2011
The killer question to ask James Murdoch
Crikey, Thursday, September 15, 2011
Murdoch special, Bolt, Hartigan and media inquiry
Mayne Report, Thursday, September 15, 2011
Who will go first - Julia Gillard or Rupert Murdoch
Crikey, Wednesday, September 7, 2011
Why isn't anyone reporting Rupert's $US33.3m salary?
Crikey, Tuesday, September 6, 2011
Does the Murdoch family have more wealth outside News Corp?
Crikey, Thursday, August 18, 2011
Why News Corp should sell down its Australian newspaper holdings
Crikey, Monday, August 15, 2011
Rupert hangs up on Four Corners and his own business journalists
Crikey, Thursday, August 11
Special email edition to News Corp analysts ahead of earnings conference call
Wednesday, August 10, 2011
Special edition seeking support for one last trip to New York for Rupert AGM
Tuesday, July 19, 2011
The Australian clears Gillard as bully boy Bolt remains defiant
We produced this detailed examination in our August 30 edition of the attempted smear of Julia Gillard by the aggressive right wing triumvirate of Andrew Bolt, Michael Smith and Glenn Milne.
In our view, the issues about what Julia Gillard knew of the AWU irregularities were worthy of discussion, but certainly not in the style or context pursued by this blokey trio and only if the facts were accurately presented.
Whilst Milne was sacked from Insiders and hasn't appeared in The Australian again and 2UE attempted to sack Mike Smith but was reportedly thwarted by Julia Gillard's Fair Work Act, News Ltd and Network Ten have seemingly done nothing to discipline the forever bullying Andrew Bolt.
Even The Weekend Australian produced this interesting piece by Hedley Thomas last Saturday which revealed Pauline Hanson's controversial former adviser John Pasquarelli was behind the statutory declaration produced by former AWU heavyweight Bob Kernohan shortly before the 2010 election. Pasquarelli is a former Liberal too, which smashes the credibility of saying Kernohan was a genuine Labor man seeking truth and justice for his long-suffering members.
And then there was these killer lines from long-serving investigative News Ltd reporter Hedley Thomas:
The Weekend Australian has examined thousands of pages of documentation and conducted numerous interviews to test long-standing allegations, referred to in last year's statutory declaration, that Ms Gillard – as a junior partner at the Melbourne law firm Slater & Gordon – was involved in wrongdoing by her then boyfriend, Mr Wilson.
None of the material examined is capable of supporting the claims that Ms Gillard was a beneficiary of ill-gotten funds or that she knew at the time that Mr Wilson was involved in alleged fraud.
On the material available, the most that could be said is that Ms Gillard and Slater & Gordon provided legal advice to Mr Wilson at the time and that she was unaware he was simultaneously involved in alleged fraud.
End of story, you would think, yet Andrew Bolt is the only person yet to have conceded he was wrong to claim a scandal was about to break that was so damaging for the PM, that she may be forced to resign.
Westpac breaks new ground with female directors
Congratulations to Westpac for being the first Australian top 20 company to have 4 female directors. The milestone was reached with yesterday's announcement that Shell's head of upstream operations in Australia, Ann Pickard, would join the board on December 1.
Pickard joins managing director Gail Kelly, Elizabeth Bryan and Carolyn Hewson on the Westpac board.
Another interesting development in the gender battle yesterday was the debate put on in Sydney yesterday by the Diversity Council of Australia.
Carol Schwartz opened the batting in favour of quotas and lawyer Danny Gilbert led the charge against. From everything I've seen Carol is the most effective advocate in Australia on this issue.
She goes in hard, takes on all comers in public forums and puts her money where her mouth is. Go Carol!
Interestingly, Carol's family is a long-time client of Westpac and she joined the board of Bank of Melbourne when the Victorian brand was relaunched by Westpac a few months back.
Metcash, News Corp, standing proxies - an update from the Australian Shareholders' Association
I attended my first face-to-face board meeting of the Australian Shareholders' Association in Sydney on Tuesday. It was an interesting discussion about a range of issues over 7 hours and I certainly have no regrets about running for the board and being elected by the members in May this year.
We did discuss the News Corp situation and I'm seeking resources to bring in some outside help to prosecute the News Corp campaign. In this regard, the best thing readers of The Mayne Report could do is join the ASA.
Students and under 25s can now join for just $60 a year, we've introduced a new green category at $115 if you'd like to cut down on paper consumption and there is the classic membership which receives a print version of our monthly magazine, Equity, priced at $125.
Another really interesting development discussed at the board meeting is the way that retail shareholders can now deliver a standing proxy in favour of ASA which applies into the future at all AGMs and EGMs of the nominated companies.
With the loss of talent from the two major proxy voting houses, Risk Metrics and CGI Glass Lewis, voting recommendations and proxy aggregation is an important area for the ASA to focus on in the future.
ASA is already an emerging powerhouse as a proxy aggregator for retail investors. We were appointed to represent almost $5 billion worth of stock last year. At the recent Metcash AGM our 2.8 million undirected proxies were the swing vote that would have determined whether the remuneration report had suffered a 25% against vote, but for the fact that both the shareholders present and chairman Peter Barnes declined to call a poll.
ASX Ltd kicked off the main AGM season yesterday and the mail box has been extremely full this week as notices of meeting pour in.
The last week of October is always the busiest week of the season and given that companies must give shareholders 28 days notice of the AGM, we're expecting an overloaded mail box every day next week.
Stand by for a busy time for all those ASA volunteers who step up to the plate and monitor almost 200 ASX listed companies for Australia's peak body for retail investors.
A blast from the Crikey past pops up in Manningham media blitz
Manningham snake catcher Raymond Hoser achieved the interesting honour of being simultaneously covered by Today Tonight and A Current Affair last month for allowing a snake to bite his 12-year-old daughter during one of his shopping centre shows.
Hoser has an interesting place in the history of Crikey.com which occurred early in our five year tour of duty editing and publishing Australia's best known ezine before it was sold to Eric Beecher and Di Gribble in March 2005.
Almost 10 years ago, I published one of Hoser's hard-hitting press releases as a post script to this now edited piece on Crikey about so-called “cash for preferences” deals.
Buried at the bottom of Hoser's missive, and unread by me at the time, was an attack on shock jock Steve Price which was removed as soon as Price's lawyers complained the following day.
After examining the facts of the matter we found it hard to defend Hoser's words and never tried to do so in the ensuing $200,000 legal onslaught launched by Price which led to the loss of our family home and a $50,000 settlement in February 2002.
Whilst launching a Supreme Court defamation action was a massive over-reaction by Price, it is fair to say that the vast bulk of the settlement related to my subsequent provocation of Price and his legal team, rather than the original Hoser words which would have been read by less than 100 people before they were removed.
For instance, the many lawyers who receive these emails will be amused to know the original letter responding to the senior associate who instructed junior and senior counsel to prepare the writ was addressed as follows:
Adrian Anderson
Not yet a partner
Corrs Chambers Westgarth
Cheeky, eh!
Anderson went on to become head of operations at the AFL and it was interesting how the Price legal team was also the Herald Sun's preferred legal team. Then Herald Sun editor Peter Blunden rewarded Price with a well-paid column shortly after he launched a multi-pronged legal assault on me, which included a civil contempt of court action and an injuction on the sale of our home. Not that any of this led me to conclude News Corp plays hardball with critics, of course.
Still, this experience was the making of Crikey from a business perspective as monthly revenues tripled to $30,000 and it also hardened us to deal with the slings of arrows of life in online publishing, politics and shareholder activism.
For the next six years after the settlement we lost touch with Hoser, but he then popped up as a competing candidate at the 2008 Manningham City Council elections. We had a cheerful chat at the swearing in ceremony where Paula joked that we'd like our old East Melbourne home back.
Hoser's running mate, ALP member Meg Downie, won a seat on council in the Mullum Mullum ward on the back of his preferences. She then went on to defeat me 7-2 in a private ballot for the deputy mayor's position at last year's council AGM.
Deputy major Downie initially stuck by Hoser during this recent burst of publicity, posting a supportive comment to the local Murdoch paper which splashed with the sensational "snake bites daughter" yarn last month. She then recanted and apologised the following week after a negative response from the public.
In light of these developments, I'm not expecting our deputy mayor to make any more requests that her running mate's snake catching business be promoted on the Manningham Council website.
Finally, here are links to some of the press coverage about Mr Hoser over the past few weeks:
Snake handler breaches licence conditions
Herald Sun, August 18
Snake handler licence conditions story
Manningham Leader, August 18
Manningham deputy mayor supports Raymond Hoser
Manningham Leader, August 17
Today Tonight story on Channel 7
A Current Affair story on Channel 9
Page 3 Herald Sun story on child biting video
Page one of Manningham Leader on child biting video
It should be stressed that Hoser is back in business. Indeed, the Herald Sun this week reported that his business has been very busy attending call-outs for people who discover snakes on their property.
He was even quoted in this story on the International Business Times website.
Good luck to Raymond Hoser, one of the more colourful characters who emerges in the rich tapestry that is local goverment politics and internet publishing.
Pro bono Advertisement: Special offer for discounted tickets at upcoming Trading and Investing Expo
With the market tanking, now is a critical time for investors and traders of all levels to develop the skills and understanding they need to safeguard their money and grow their future wealth.
So why not come along to Australia's leading investor education event – the Trading & Investing Seminars & Expo featuring a major exhibition and over 60 seminars from some of the best known investment experts in the country.
It's a rare opportunity to learn from other speakers too including Peter Switzer, Alan Kohler, Marcus Padley, Tom Elliott, Alan Hull, Louise Bedford and many more as they share valuable insights and proven investment strategies.
I'll be there with Australian Shareholders' Association CEO Vas Kolesnikoff speaking on the definitive Shareholder Activist Guide to assessing the directors and CEOs who deliver value.
There will also be a main stage panel discussion.
We've secured Mayne Report readers a FREE ticket to attend the Trading & Investing Seminars & Expo at the Melbourne Convention and Exhibition Centre, on Friday October 7 and Saturday October 8 (Tickets normally $18 – so it's a great saving!).
To secure your free Expo ticket, simply click here and follow the prompts. When asked to enter the special Promotional Code, type in the text ‘MAYNE' and the tickets will be emailed straight to your inbox!
If you wish to book any of the paid Workshops, simply follow the prompts (fees range between $10 to $20 – advance bookings essential!)
For full details visit: tradingandinvestingexpo.com.au
The last six Mayne Report email editions
We've had some lively material in recent months and here are the links to our last six email editions:
Murdoch special, media inquiry, pokies, Manningham, Zara, secretive councillors, Vodafone and then some
Thursday, September 15, 2011
Bumper August edition: Bolt, Gillard, pokies, Murdoch, Gunns, unions, ASA, Manningham and Woolies
Tuesday, August 30, 2011
Special email edition to News Corp analysts ahead of earnings conference call
Wednesday, August 10, 2011
One last trip to New York for Rupert AGM
Tuesday, July 19, 2011
Murdoch, hacking, councillor conduct, ASA, ranking Queensland councillors, Richo and capital raisings
Friday, July 8, 2011
Elected to ASA board, pokies, Rio, Santos, RHG, Hartigan, Manningham, capital raisings and Rich List
Thursday, May 19, 2011
Donate to help keep us going
The Mayne Report has wracked up losses of more than $300,000 since we launched in October 2007 and we moved to a free model in June 2009 after struggling along seeking subscriptions for the first 21 months.
It has been nice to receive more than $20,000 worth of donations over the past two years and if you fancy giving us a hand to help fund our activism and keep us going on the political and AGM circuit, just click on the image below:
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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 1500 names with those who've fallen back below $10 million now italicised. If you fancy giving us a tip about someone we've missed, click on the link below;
Tales from the talk circuit - preparing for State Library lecture
The talk circuit is going to be busy through until the end of the year.
Whilst normally delivering fast-paced discussions off the cuff, the State Library of Victoria Stephen Murray Smith Memorial Lecture on October 13 will be a different kettle of fish.
Previous speakers have included Gareth Evans, Geoffrey Blainey and Anne Summers and the convention is to deliver a prepared text.
The topic is "Governance, transparency and power: how does Australia rate?".
That's a very wide canvas to draw on. This flyer was sent out on Tuesday and if you'd like to come from 6.30pm on October 13, call 03 8664 7099 or email bookings@slv.vic.gov.au
Meanwhile, click here for feedback after some previous speeches and click on the image below if you fancy an engagement as the talk circuit does partially offset the costs of maintaining The Mayne Report:
Sign up for campaign and governance Tweets
Click on the image above to join more than 6200 followers on Twitter. We are regularly dropping out observations about journalism, politics, breaking stories, local government and shareholder activism and here are some of the Tweets from this week:
September 22: Baillieu, margin calls, foreign ownership
Classic gotcha from Neil Mitchell on Baillieu re-heating a John Brumby MCG redevelopment press release word for word: http://www.3aw.com.au/blogs/breaking-news-blog/ted-brumby-baillieu-and-the-g/20110923-1knvq.html
Like thousands of others, just got CommSec text warning of potential margin call due to diving markets. Loan is $10,257 on $19,530 of equity
Doing a Mayne Report email special on foreign ownership today and here is a taste from last night's 7.30 story: http://www.abc.net.au/7.30/content/2011/s3323940.htm
September 21: RBA loss, Hobsons Bay secrecy and Foster's
RBA annual report is out. Lost $4.9bn due to soaring dollar impact on $40bn of foreign reserves. No dividend. Ouch. See http://www.rba.gov.au/publications/annual-reports/rba/2011/html/index.html
Strong run in local Fairfax paper getting into secretive regime at Hobsons Bay council led by a Conroy-backed mayor: http://www.hobsonsbayweekly.com.au/news/local/news/general/tony-briffa-in-new-challenge/2299182.aspx
Today's Crikey story on the $12.3bn Foster's takeover by SAB-Miller. Sad but unavoidable due to constant mismanagement: http://www.crikey.com.au/2011/09/22/mayne-fosters-sale-sad-but-unavoidable/#comments
Just did Sky News Business pre-record in front of Fosters HQ. Next is ABC 7pm news, then 7.30 then filing for Crikey. Kids only 5mins late.
Phone running hot with Foster's takeover. Just did ABC Sydney, about to do Radio Australia, News Radio at 8.15am and Paula is away too!
Just listening to the forever wooden Wayne Swan waffle on in QT. He is so inferior to Keating. Tanner would have been a great Treasurer.
Eric Beecher has given interview bagging forced News Ltd sales. Why? It's normal in takeovers. If Foxtel wants Austar it should sell papers
Fun watching "News Australia" whip up frenzy over flag scene in At Home With Julia. Even dragged in dead diggers. See: http://www.heraldsun.com.au/entertainment/tv-radio/coalition-mps-unfurl-fury-over-sitcom/story-e6frf9ho-1226142163516
September 20: News Australia rebranding, Murray Goulburn, Manningham agenda, ASA
Today's News Ltd rebranding document is a top 10 Crikey scoop of all time. A cracker. Read it here: http://www.crikey.com.au/2011/09/21/project-darwin-news-ltd-to-become-news-australia/
Today's Crikey story getting stuck into Andrew Bolt for again spruiking Singo's campaign against pokies reform. See: http://www.crikey.com.au/2011/09/21/bolt-exaggerates-paymasters-anti-pokies-campaign-again/#comments
Good to see Weekly Times produce p3 lead on governance at Murray Goulburn. Also discussed at ASA board yesterday. See: http://www.weeklytimesnow.com.au/article/2011/09/21/384881_dairy.html
Agenda 4 next week's council meeting are online. Big items are Warrandyte tower, Templestowe Arts Centre and The Pines: http://www.manningham.vic.gov.au/maccwr/_assets/main/lib90260/council%20agenda%2027-sep-2011%20full.pdf
Just finished interesting 7 hour ASA board meeting in Chatswood. Pretty tired after alarm went off at 4.40am. Off for drink with activist.
That's all for now.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
Welcome to this special edition on Australia's foreign ownership problems in light of the Foster's takeover, plus some others item on News Corp, the RACV contested elections, pokies, Manningham, female directors, Woolies, pokies and snake catchers.
Some home truths about foreign ownership and Australia's corporate performance
The proposed $12.3 billion takeover of Foster's by SAB-Miller has sparked a flood of media discussion which may yet turn into a game changer in the broader political debate.
Wearing an Australian Shareholders' Association hat, I was quoted as follows in this story on 7.30 last night:
Sad day for Australia. Our foreign ownership record gets even worse from a very bad level already.
There aren't even 70 Australian companies that generate more than $200 million a year in revenue offshore, and now there's one less with Foster's disappearing and there just aren't enough successful Australian international companies.
A magnificent beer business in Australia, well-managed in Australia, great cash flows, great distribution, great brands, and for years the management have used that cash to stuff things up in wine, starting a finance company, going offshore. They've lost between $5 and $10 billion, squandering the magnificent cash thrown off by a majority position in the Australian beer market.
Coopers and the other micro-breweries will be a beneficiary from this perceived concern about foreign domination of beer in a country like Australia. But because the big brewers dominate distribution, it is still quite difficult logistically to break into the market, and you've also got the problem of the absolute dominance of Woolworths in liquor like no other country in the world, and even SAB Miller will find that difficult, because Foster's and Woolies have been at war for the last few months.
An even sadder day for Melbourne
Way back in 1992 at the peak of Paul Keating's recession we had to have and with Victoria copping "bleak city" sledges from up north, I attended a breakfast with then Victorian Labor Treasurer Tony Sheehan and then NAB CEO Don Argus.
Argus was trying to be upbeat and stressed that Melbourne was home to 8 of Australia's 10 most valuable listed companies. Fast forward 19 years and this is how the top 30 will look once you strip out Foster's and Coal & Allied assuming both takeovers go through.
1. BHP-Billiton, resources, Melbourne
2. Commonwealth Bank, financial services, Sydney
3. Westpac, financial services, Sydney
4. ANZ, financial services, Mebourne
5. NAB, financial services, Melbourne
6. News Corp, media, New York
7. Telstra, communications, Melbourne
8. Wesfamers, retail and diversified, Perth
9. Rio Tinto, resources, London
10. Woolworths, retailing, Sydney
11. Newcrest, mining, Melbourne
12. Woodside, petroleum, Perth
13. Fortescue Metals, iron-ore, Perth
14. Westfield, shopping centres, Sydney
15. Origin Energy, energy utility, Sydney
16. CSL, pharmaceuticals, Melbourne
17. QBE, insurance, Sydney
18. AMP, financial services, Sydney
19. Suncorp, financial services, Brisbane
20. Santos, energy, Adelaide
21. Brambles, industrial services, Sydney
22. Orica, chemicals, Melbourne
23. Coca Cola Amatil, beverages, Sydney
24. Amcor, packaging, Melbourne
25. QR National, rail, Brisbane
26. Macquarie Group, financial services, Sydney
27. Transurban, tollroads, Melbourne
28. Stockland, property, Sydney
29. AGL, energy utility, Sydney
30. Insurance Australia Group, insurance, Sydney
From 8 of the top 10, Melbourne has declined to just 9 of the top 30. The departing players over the past 20 years have included Pacific Dunlop, BTR Nylex, North, Coles Myer, CRA, Woodside, Colonial and even Mayne Nickless. To now lose Foster's is a big blow.
Where are all the mining stocks?
The above list tells a range of other stories above and behind Melbourne's relative decline as a corporate centre in Australia.
Firstly, why aren't there more resources stocks in the country with the best dowry on earth? It's simple: the vast majority of our $1 trillion-plus worth of resources assets are foreign owned, which denies Australians a large direct exposure to the biggest mining boom in history through their compulsory superannuation.
Why so many financial services giants?
The second startling fact is the dominance of financial services companies. No other country has banks as 4 of its 5 most most valuable listed companies. This reflects the cartel like dominance of the Big Four who deliver the world's most expensive banking service to long-suffering Australians. No wonder the Bendigo Community Bank model continues to go from strength to strength.
It also reflects the enormous churning gravy train created by compulsory superannuation whereby Australian's have happily tripled their collective home loan exposure to more than $1 trillion over the past decade because they believe compulsory superannuation will look after their retirement. Alas, the Baby Boomers have lived decadent lives with insufficient overall savings and have a rude shock ahead of them when they consider the aged care services they will be able to purchase. It will be magnified if Australia's housing bubble ever really bursts, especially given those large mortgages carried by middle Australia.
Australia is the only country in the world which allows the same financial conglomerates to dominate the field in allocating debt and equity through the economy, even though their are obvious conflicts involved, especially in workout situations. Who can forget the Commonwealth Bank simultaneously having a $1 billion-plus debt exposure to Centro whilst its superannuation clients dropped more than $500 million as the largest investor on the equity side.
It is not healthy for the econony to have so many financial giants dominating the ASX and it certainly hasn't helped create a culture of shareholder pressure because banking conglomerates rarely vote against poorly performing directors as they fear losing business from the company involved.
Updating the comprehensive foreign ownership lists
The Mayne Report has long produced lists which track foreign ownership in Australia and we've spent some time updating them today.
Our main contention is that Australia does not nurture or celebrate enough international success stories in business. Whilst there is nothing wrong with foreign investment, our business leaders have squandered the world's best dowry or natural assets and we are now one of the most foreign-owned first world economies on earth.
The key lists are as follows:
Australian companies which stuffed up expanding offshore
The 300 foreign companies which dominate Australian business
The miserable 70 Australian companies who generate $200m-plus offshore
Far too many of Australia's so-called success stories are local service sector oligopolies. Where are the export earnings, apart from ripping off the Kiwis. Look no further than the Big Four banks, Wesfarmers and Woolworths.
Woolworths has fatter profit margins than any other grocery retailer in the world. It's called abusing excessive market power.
After Wesfarmers bought Coles they decided to emulate the brutal Woolworths model of taking over supplier brand equity with home brands and screwing them on price.
It has worked in spades for Ian Mcloud, the Englishman imported to turn Coles into Woolworths, as he pocketed a tidy $15 million in 2010-11.
Whilst efficient logistics and well capitalised banks are vital for any economy, big banks and supermarket chains are meant to facilitate everyone else in business, not soak up so much of the value chain that they dominate the market capitalisation league ladders on the ASX.
A small number of international success stories
Without wishing to be too negative, here are my top five Australian international success stories:
1. CSL: transformed a government monopoly in blood products into the world's second biggest plasma company whilst making shareholders a fortune along the way. A perfect example of how the national champion model should work, but it's a shame the supermarket duopoly and our Big Four banks haven't followed suit, instead preferring to stay domestically focused abusing their local dominance.
2. Cochlear: hi-tech manufacturing and Melbourne technology which created a world leading hearing product which has done a stack of social good and delivered in spades for shareholders. If only there were more like it.
3. Computershare: seized on the natual advantage of Australia being a great shareholding country courtesy of demutualisation, privatisation and compulsory super. Overlayed this with great technology and consolidated the sleepy accounting firms out of the share registry business before taking the model to the world and becoming the world's biggest share registry company whilst delivering superbly over the long term for investors. And founder Chris Morris is a Manningham boy (Templestowe, like me, to be precise) whose parents both sadly passed away in a nearby nursing home over the past year.
4. Westfield: the best thing that ever happened to Australian business was taking more Jewish refugees and immigrants after the second world war in per capita terms than any other country in the world. It delivered a generation of successful entrepreneurs and Frank Lowy was the best of them, rolling out his pioneering mega-malls model to the English speaking world. We love him in Manningham as Doncaster was his first acquisition outside of Sydney in 1969 and he's now turned it into the best shopping centre in Victoria after a stunning $600 million redevelopment shortly before the GFC hit. Whilst the returns to shareholders have stalled since the three way Westfield merger of 2004, Frank Lowy has still created the world's biggest shopping centre empire and anyone who has been on board for more than a decade has done extremely well.
5. News Corp: has underperformed financially for the past 15 years courtesy of crazy deals such as Myspace, Dow Jones and selling DirecTV for a song, but businesses such as BSkyB and Fox News have still been phenomenally successful and anyone who bought News Corp between 1953 and 1980 has still done very well. Rupert may lack a moral compass, but you've still got to take your hat off to a bloke who was born in Melbourne and remains the leader of the most powerful family in the world right now.
RACV elections - support the successful incumbents
Whilst Melbourne continues to lose prominence and head quarters courtesy of foreign buy-ups and the long-term drift to Sydney and Perth, it is good to know that it is still home to Australia's biggest remaining mutual.
My better half, Paula Piccinini, was popularly elected to the board of the RACV in 2006 and over the past 5 years has been very impressed with the cohesion of the board and management team, along with the overall performance. And this is not just because RACV has five female directors.
It's hard to argue with a $500 million investment program building and acquiring one of Australia's best resort networks. The decision to build the $200 million City Club at 501 Bourke Street was an inspired move by the directors shortly after another inspired decision in 1999: forming an insurance joint venture with Insurance Australia Group. Click here to see what Steven Batholomeusz wrote about that at the time.
Over the past three years alone, RACV has rebuilt its Healesville country club, built a greenfields resort at Inverloch, picked up magnificent assets on the Gold Coast and Noosa from distressed sellers and is now embarking on an $80 million spend at the Torquay Golf Club.
The 2010-11 annual report is out and RACV reported a net after-tax profit of $58.2 million, which was largely delivered by the $82 million dividend from the insurance joint venture with IAG. It remains debt free with $60 million in cash and a solid investment portfolio over and above the resort assets and the 30% stake in Insurance Manufacturers Australia.
What I've liked about RACV, watching from the perspective of being a director hand bag, is the way they've used the compulsory retirement age of 72 to build an even stronger board with a good mix of community and commercial skills. Geographic, gender, age, cultural and skills diversity is important for a board and in my view RACV has a really good mix.
For instance, one of the directors up for election in the current ballot is John Slattery, who was managing partner of legal firm Corrs. Every board needs a tough commercial lawyer who has been around the block.
The other incumbent is Suzanna Sheed, who runs her own family law legal practice in Shepparton and absolutely flogged me and Paula in the 2005 elections. Suzanna has a really good fix on regional and community issues, plus a strong legal mind.
Anyway, here is the spiel from John Slattery and Suzanna Sheed who will certainly be getting our votes and we hopes yours too:
John Slattery and Suzanna Sheed, current RACV Directors, are standing for re-election in the 2011 RACV Board election. Voting papers have been distributed by direct mail and in the October RoyalAuto. Voting is open to both Service and Club members.
We seek your support by voting for both Suzanna and John. You will see from the ballot paper that there are six candidates, and only two vacancies to be filled.
We believe that a vote for the current directors is a vote for a successful and experienced team which works well together, and has an impressive track record of achievements.
Please forward this email with your recommendation to your family, friends and other contacts who may be interested.
RECENT ACHIEVEMENTS OF CURRENT RACV DIRECTORS INCLUDE:
· voluntary payments to 300 members who were victims of the January 2011 Victorian floods and whose RACV policies did not have flood cover;
· a program of investing in RACV resorts, to enhance member benefits through continued improvement to the quality of resorts, and the experience of members and their families;
· advocating to exclude petrol from the carbon tax; and
· ongoing lobbying of government to improve the quality of roads for all users, to reduce road congestion, and to improve public transport options throughout Victoria.
WE ARE COMMITTED TO:
· continuing to improve member benefits by improving facilities at resorts and the Show Your Card and Save Program;
· improving the safety of roads throughout Victoria for motorists, motor cyclists and cyclists and in particular supporting the elderly, and newly licensed drivers/riders;
· ensuring the progress of major rural road projects, including the completion of duplication of key highways, such as Stawell to Ballarat, Geelong to Colac and Traralgon to Sale, and to by-pass key regional hubs including Shepparton; and
· delivering benefits to members and their communities through activities, advice, representation and assistance across the range of RACV fields of motoring, mobility, leisure, assurance, financial services, social well-being and the home.
Thank you for your support.
John Slattery and Suzanna Sheed
* Authorised by John Slattery and Suzanna Sheed
See more details on the election on the RACV website.
Regime change at Woolworths - will the new guard give ground on the pokies?
Grant O'Brien formally takes over from Michael Luscombe as CEO of Woolworths on September 30.
The transition coincides with another important change at Australia's biggest retailer because on Friday week pokies billionaire Bruce Mathieson will also step back as CEO of the ALH pubs operation and will instead be a not-so-humble non-executive director.
Whilst it was the supposedly devout Anglican Roger Corbett who took Woolies into its notorious joint venture with Alan Bond's former business partner, Luscombe was an enthusiastic adopter.
The selection of a clean cut Tasmanian accountant to succeed Luscombe could yet be a game changer. Grant O'Brien's first major speech was to the big Australian Local Government Association national conference in Canberra in June.
In front of a record 800 delegates, he talked about all the great things that Woolies does in the community but then wasn't available to answer the question I intended to ask about the enormous social damage being caused by "the fresh food people" also turning themselves into Australia's biggest pokies operation with more than 12,000 machines across Australia.
Manningham also hasn't enjoyed having to spend a big six figure sum fighting an aggressive Woolworths action in the Victorian Supreme Court which is attempting to stop us from dealing with our own land to facilitate a supermarket development at Jackson Court in East Doncaster after Woolies converted its own supermarket into a giant Dan Murphy's grog shop.
Click here to see some of the relevent court documents.
How to deal with a Daily Telegraph pokies beat up
Meanwhile, it was great to see Paul Bendat, Nick Xenophon and Andrew Wilkie all team up to demolish a disgraceful beat-up by Andrew Clennell of The Daily Telegraph in relation to pokies reform, which opened up as follows:
"The poker machine restrictions on which Julia Gillard is staking her prime ministership have failed in the only country in the world to have introduced a mandatory pre-commitment spending limit."Paul Bendat from pokieact.org was quick out of the blocks with this blog post on September 14, the day the article appeared.
Senator Xenophon and Andrew Wilkie then did a joint media effort and it all culminated in Media Watch highlighting Clennell's story as an example of gross media distortion at the end of this long piece broadcast on Monday night about the forthcoming media inquiry. It was watched by 590,000 people across Australia.
All this was good potent stuff and an example of how outrageous distortions by vested interests such as Clubs NSW should be tackled.
Finally, check out the latest from Paul Bendat's Pokieact website and this package of our past pokies coverage.
And try watching this 30 second anti-pokies ad made by Paul Bendat a couple of years back featuring our daughter Alice, who was 6 at the time:
Lunch with two independent News Corp directors
The Australian Shareholders' Association usually has good access to boards and directors of Australian listed companies.
Whilst the odd recalcitrant such as CSR or Qantas chairman Leigh Clifford occasionally put up the shutters and decline to engage, good on News Corp directors Sir Rod Eddington and Peter Barnes for agreeing to meet me for lunch in Melbourne next Wednesday.
As the ASA News Corp monitor, I'll be approaching the lunch following the normal diplomatic custom that either party is free to discuss the position they put at the meeting. Mine was laid out comprehensively in this 1600 word piece which appeared on The Age and SMH business website last week.
However, neither party should disclose anything about the response to their positions unless given authority by the other party.
In other words, I won't be reporting anything specific about what Sir Rod or Peter Barnes say at the meeting unless they authorise it, which is probably quite unlikely.
Meanwhile, here are the latest links to our coverage of the Murdoch governance scandal over the past eight weeks:
Inside the News Corp governance campaign
Fairfax's Businessday.com.au, Thursday, September 15, 2011
The killer question to ask James Murdoch
Crikey, Thursday, September 15, 2011
Murdoch special, Bolt, Hartigan and media inquiry
Mayne Report, Thursday, September 15, 2011
Who will go first - Julia Gillard or Rupert Murdoch
Crikey, Wednesday, September 7, 2011
Why isn't anyone reporting Rupert's $US33.3m salary?
Crikey, Tuesday, September 6, 2011
Does the Murdoch family have more wealth outside News Corp?
Crikey, Thursday, August 18, 2011
Why News Corp should sell down its Australian newspaper holdings
Crikey, Monday, August 15, 2011
Rupert hangs up on Four Corners and his own business journalists
Crikey, Thursday, August 11
Special email edition to News Corp analysts ahead of earnings conference call
Wednesday, August 10, 2011
Special edition seeking support for one last trip to New York for Rupert AGM
Tuesday, July 19, 2011
The Australian clears Gillard as bully boy Bolt remains defiant
We produced this detailed examination in our August 30 edition of the attempted smear of Julia Gillard by the aggressive right wing triumvirate of Andrew Bolt, Michael Smith and Glenn Milne.
In our view, the issues about what Julia Gillard knew of the AWU irregularities were worthy of discussion, but certainly not in the style or context pursued by this blokey trio and only if the facts were accurately presented.
Whilst Milne was sacked from Insiders and hasn't appeared in The Australian again and 2UE attempted to sack Mike Smith but was reportedly thwarted by Julia Gillard's Fair Work Act, News Ltd and Network Ten have seemingly done nothing to discipline the forever bullying Andrew Bolt.
Even The Weekend Australian produced this interesting piece by Hedley Thomas last Saturday which revealed Pauline Hanson's controversial former adviser John Pasquarelli was behind the statutory declaration produced by former AWU heavyweight Bob Kernohan shortly before the 2010 election. Pasquarelli is a former Liberal too, which smashes the credibility of saying Kernohan was a genuine Labor man seeking truth and justice for his long-suffering members.
And then there was these killer lines from long-serving investigative News Ltd reporter Hedley Thomas:
The Weekend Australian has examined thousands of pages of documentation and conducted numerous interviews to test long-standing allegations, referred to in last year's statutory declaration, that Ms Gillard – as a junior partner at the Melbourne law firm Slater & Gordon – was involved in wrongdoing by her then boyfriend, Mr Wilson.
None of the material examined is capable of supporting the claims that Ms Gillard was a beneficiary of ill-gotten funds or that she knew at the time that Mr Wilson was involved in alleged fraud.
On the material available, the most that could be said is that Ms Gillard and Slater & Gordon provided legal advice to Mr Wilson at the time and that she was unaware he was simultaneously involved in alleged fraud.
End of story, you would think, yet Andrew Bolt is the only person yet to have conceded he was wrong to claim a scandal was about to break that was so damaging for the PM, that she may be forced to resign.
Westpac breaks new ground with female directors
Congratulations to Westpac for being the first Australian top 20 company to have 4 female directors. The milestone was reached with yesterday's announcement that Shell's head of upstream operations in Australia, Ann Pickard, would join the board on December 1.
Pickard joins managing director Gail Kelly, Elizabeth Bryan and Carolyn Hewson on the Westpac board.
Another interesting development in the gender battle yesterday was the debate put on in Sydney yesterday by the Diversity Council of Australia.
Carol Schwartz opened the batting in favour of quotas and lawyer Danny Gilbert led the charge against. From everything I've seen Carol is the most effective advocate in Australia on this issue.
She goes in hard, takes on all comers in public forums and puts her money where her mouth is. Go Carol!
Interestingly, Carol's family is a long-time client of Westpac and she joined the board of Bank of Melbourne when the Victorian brand was relaunched by Westpac a few months back.
Metcash, News Corp, standing proxies - an update from the Australian Shareholders' Association
I attended my first face-to-face board meeting of the Australian Shareholders' Association in Sydney on Tuesday. It was an interesting discussion about a range of issues over 7 hours and I certainly have no regrets about running for the board and being elected by the members in May this year.
We did discuss the News Corp situation and I'm seeking resources to bring in some outside help to prosecute the News Corp campaign. In this regard, the best thing readers of The Mayne Report could do is join the ASA.
Students and under 25s can now join for just $60 a year, we've introduced a new green category at $115 if you'd like to cut down on paper consumption and there is the classic membership which receives a print version of our monthly magazine, Equity, priced at $125.
Another really interesting development discussed at the board meeting is the way that retail shareholders can now deliver a standing proxy in favour of ASA which applies into the future at all AGMs and EGMs of the nominated companies.
With the loss of talent from the two major proxy voting houses, Risk Metrics and CGI Glass Lewis, voting recommendations and proxy aggregation is an important area for the ASA to focus on in the future.
ASA is already an emerging powerhouse as a proxy aggregator for retail investors. We were appointed to represent almost $5 billion worth of stock last year. At the recent Metcash AGM our 2.8 million undirected proxies were the swing vote that would have determined whether the remuneration report had suffered a 25% against vote, but for the fact that both the shareholders present and chairman Peter Barnes declined to call a poll.
ASX Ltd kicked off the main AGM season yesterday and the mail box has been extremely full this week as notices of meeting pour in.
The last week of October is always the busiest week of the season and given that companies must give shareholders 28 days notice of the AGM, we're expecting an overloaded mail box every day next week.
Stand by for a busy time for all those ASA volunteers who step up to the plate and monitor almost 200 ASX listed companies for Australia's peak body for retail investors.
A blast from the Crikey past pops up in Manningham media blitz
Manningham snake catcher Raymond Hoser achieved the interesting honour of being simultaneously covered by Today Tonight and A Current Affair last month for allowing a snake to bite his 12-year-old daughter during one of his shopping centre shows.
Hoser has an interesting place in the history of Crikey.com which occurred early in our five year tour of duty editing and publishing Australia's best known ezine before it was sold to Eric Beecher and Di Gribble in March 2005.
Almost 10 years ago, I published one of Hoser's hard-hitting press releases as a post script to this now edited piece on Crikey about so-called “cash for preferences” deals.
Buried at the bottom of Hoser's missive, and unread by me at the time, was an attack on shock jock Steve Price which was removed as soon as Price's lawyers complained the following day.
After examining the facts of the matter we found it hard to defend Hoser's words and never tried to do so in the ensuing $200,000 legal onslaught launched by Price which led to the loss of our family home and a $50,000 settlement in February 2002.
Whilst launching a Supreme Court defamation action was a massive over-reaction by Price, it is fair to say that the vast bulk of the settlement related to my subsequent provocation of Price and his legal team, rather than the original Hoser words which would have been read by less than 100 people before they were removed.
For instance, the many lawyers who receive these emails will be amused to know the original letter responding to the senior associate who instructed junior and senior counsel to prepare the writ was addressed as follows:
Adrian Anderson
Not yet a partner
Corrs Chambers Westgarth
Cheeky, eh!
Anderson went on to become head of operations at the AFL and it was interesting how the Price legal team was also the Herald Sun's preferred legal team. Then Herald Sun editor Peter Blunden rewarded Price with a well-paid column shortly after he launched a multi-pronged legal assault on me, which included a civil contempt of court action and an injuction on the sale of our home. Not that any of this led me to conclude News Corp plays hardball with critics, of course.
Still, this experience was the making of Crikey from a business perspective as monthly revenues tripled to $30,000 and it also hardened us to deal with the slings of arrows of life in online publishing, politics and shareholder activism.
For the next six years after the settlement we lost touch with Hoser, but he then popped up as a competing candidate at the 2008 Manningham City Council elections. We had a cheerful chat at the swearing in ceremony where Paula joked that we'd like our old East Melbourne home back.
Hoser's running mate, ALP member Meg Downie, won a seat on council in the Mullum Mullum ward on the back of his preferences. She then went on to defeat me 7-2 in a private ballot for the deputy mayor's position at last year's council AGM.
Deputy major Downie initially stuck by Hoser during this recent burst of publicity, posting a supportive comment to the local Murdoch paper which splashed with the sensational "snake bites daughter" yarn last month. She then recanted and apologised the following week after a negative response from the public.
In light of these developments, I'm not expecting our deputy mayor to make any more requests that her running mate's snake catching business be promoted on the Manningham Council website.
Finally, here are links to some of the press coverage about Mr Hoser over the past few weeks:
Snake handler breaches licence conditions
Herald Sun, August 18
Snake handler licence conditions story
Manningham Leader, August 18
Manningham deputy mayor supports Raymond Hoser
Manningham Leader, August 17
Today Tonight story on Channel 7
A Current Affair story on Channel 9
Page 3 Herald Sun story on child biting video
Page one of Manningham Leader on child biting video
It should be stressed that Hoser is back in business. Indeed, the Herald Sun this week reported that his business has been very busy attending call-outs for people who discover snakes on their property.
He was even quoted in this story on the International Business Times website.
Good luck to Raymond Hoser, one of the more colourful characters who emerges in the rich tapestry that is local goverment politics and internet publishing.
Pro bono Advertisement: Special offer for discounted tickets at upcoming Trading and Investing Expo
With the market tanking, now is a critical time for investors and traders of all levels to develop the skills and understanding they need to safeguard their money and grow their future wealth.
So why not come along to Australia's leading investor education event – the Trading & Investing Seminars & Expo featuring a major exhibition and over 60 seminars from some of the best known investment experts in the country.
It's a rare opportunity to learn from other speakers too including Peter Switzer, Alan Kohler, Marcus Padley, Tom Elliott, Alan Hull, Louise Bedford and many more as they share valuable insights and proven investment strategies.
I'll be there with Australian Shareholders' Association CEO Vas Kolesnikoff speaking on the definitive Shareholder Activist Guide to assessing the directors and CEOs who deliver value.
There will also be a main stage panel discussion.
We've secured Mayne Report readers a FREE ticket to attend the Trading & Investing Seminars & Expo at the Melbourne Convention and Exhibition Centre, on Friday October 7 and Saturday October 8 (Tickets normally $18 – so it's a great saving!).
To secure your free Expo ticket, simply click here and follow the prompts. When asked to enter the special Promotional Code, type in the text ‘MAYNE' and the tickets will be emailed straight to your inbox!
If you wish to book any of the paid Workshops, simply follow the prompts (fees range between $10 to $20 – advance bookings essential!)
For full details visit: tradingandinvestingexpo.com.au
The last six Mayne Report email editions
We've had some lively material in recent months and here are the links to our last six email editions:
Murdoch special, media inquiry, pokies, Manningham, Zara, secretive councillors, Vodafone and then some
Thursday, September 15, 2011
Bumper August edition: Bolt, Gillard, pokies, Murdoch, Gunns, unions, ASA, Manningham and Woolies
Tuesday, August 30, 2011
Special email edition to News Corp analysts ahead of earnings conference call
Wednesday, August 10, 2011
One last trip to New York for Rupert AGM
Tuesday, July 19, 2011
Murdoch, hacking, councillor conduct, ASA, ranking Queensland councillors, Richo and capital raisings
Friday, July 8, 2011
Elected to ASA board, pokies, Rio, Santos, RHG, Hartigan, Manningham, capital raisings and Rich List
Thursday, May 19, 2011
Donate to help keep us going
The Mayne Report has wracked up losses of more than $300,000 since we launched in October 2007 and we moved to a free model in June 2009 after struggling along seeking subscriptions for the first 21 months.
It has been nice to receive more than $20,000 worth of donations over the past two years and if you fancy giving us a hand to help fund our activism and keep us going on the political and AGM circuit, just click on the image below:
Alternatively, you can snail mail a cheque to PO Box 925, Templestowe 3106 or make a direct deposit to the following Westpac bank account:
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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 1500 names with those who've fallen back below $10 million now italicised. If you fancy giving us a tip about someone we've missed, click on the link below;
Tales from the talk circuit - preparing for State Library lecture
The talk circuit is going to be busy through until the end of the year.
Whilst normally delivering fast-paced discussions off the cuff, the State Library of Victoria Stephen Murray Smith Memorial Lecture on October 13 will be a different kettle of fish.
Previous speakers have included Gareth Evans, Geoffrey Blainey and Anne Summers and the convention is to deliver a prepared text.
The topic is "Governance, transparency and power: how does Australia rate?".
That's a very wide canvas to draw on. This flyer was sent out on Tuesday and if you'd like to come from 6.30pm on October 13, call 03 8664 7099 or email bookings@slv.vic.gov.au
Meanwhile, click here for feedback after some previous speeches and click on the image below if you fancy an engagement as the talk circuit does partially offset the costs of maintaining The Mayne Report:
Sign up for campaign and governance Tweets
Click on the image above to join more than 6200 followers on Twitter. We are regularly dropping out observations about journalism, politics, breaking stories, local government and shareholder activism and here are some of the Tweets from this week:
September 22: Baillieu, margin calls, foreign ownership
Classic gotcha from Neil Mitchell on Baillieu re-heating a John Brumby MCG redevelopment press release word for word: http://www.3aw.com.au/blogs/breaking-news-blog/ted-brumby-baillieu-and-the-g/20110923-1knvq.html
Like thousands of others, just got CommSec text warning of potential margin call due to diving markets. Loan is $10,257 on $19,530 of equity
Doing a Mayne Report email special on foreign ownership today and here is a taste from last night's 7.30 story: http://www.abc.net.au/7.30/content/2011/s3323940.htm
September 21: RBA loss, Hobsons Bay secrecy and Foster's
RBA annual report is out. Lost $4.9bn due to soaring dollar impact on $40bn of foreign reserves. No dividend. Ouch. See http://www.rba.gov.au/publications/annual-reports/rba/2011/html/index.html
Strong run in local Fairfax paper getting into secretive regime at Hobsons Bay council led by a Conroy-backed mayor: http://www.hobsonsbayweekly.com.au/news/local/news/general/tony-briffa-in-new-challenge/2299182.aspx
Today's Crikey story on the $12.3bn Foster's takeover by SAB-Miller. Sad but unavoidable due to constant mismanagement: http://www.crikey.com.au/2011/09/22/mayne-fosters-sale-sad-but-unavoidable/#comments
Just did Sky News Business pre-record in front of Fosters HQ. Next is ABC 7pm news, then 7.30 then filing for Crikey. Kids only 5mins late.
Phone running hot with Foster's takeover. Just did ABC Sydney, about to do Radio Australia, News Radio at 8.15am and Paula is away too!
Just listening to the forever wooden Wayne Swan waffle on in QT. He is so inferior to Keating. Tanner would have been a great Treasurer.
Eric Beecher has given interview bagging forced News Ltd sales. Why? It's normal in takeovers. If Foxtel wants Austar it should sell papers
Fun watching "News Australia" whip up frenzy over flag scene in At Home With Julia. Even dragged in dead diggers. See: http://www.heraldsun.com.au/entertainment/tv-radio/coalition-mps-unfurl-fury-over-sitcom/story-e6frf9ho-1226142163516
September 20: News Australia rebranding, Murray Goulburn, Manningham agenda, ASA
Today's News Ltd rebranding document is a top 10 Crikey scoop of all time. A cracker. Read it here: http://www.crikey.com.au/2011/09/21/project-darwin-news-ltd-to-become-news-australia/
Today's Crikey story getting stuck into Andrew Bolt for again spruiking Singo's campaign against pokies reform. See: http://www.crikey.com.au/2011/09/21/bolt-exaggerates-paymasters-anti-pokies-campaign-again/#comments
Good to see Weekly Times produce p3 lead on governance at Murray Goulburn. Also discussed at ASA board yesterday. See: http://www.weeklytimesnow.com.au/article/2011/09/21/384881_dairy.html
Agenda 4 next week's council meeting are online. Big items are Warrandyte tower, Templestowe Arts Centre and The Pines: http://www.manningham.vic.gov.au/maccwr/_assets/main/lib90260/council%20agenda%2027-sep-2011%20full.pdf
Just finished interesting 7 hour ASA board meeting in Chatswood. Pretty tired after alarm went off at 4.40am. Off for drink with activist.
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.