Putting ASIC chair Alan Cameron on the spot
By Stephen Mayne
January 23, 2008
It was a bit naughty but as a professional agitator Crikey had no alternative but to put Alan Cameron on the spot when we found ourselves speaking one slot before the corporate cop at a conference at Old Parly House in 2001.
It was a bit naughty but it had to be done. The conference was put on by SOCAP - The Society of Consumer Affairs Professionals - and I was the token rabble rouser in a sea of regulators, ombudsmen and consumer marketing people.
Jonathon Shier rambled on for 40 minutes in the morning and then fled the press without even answering a question.
By the time we got to my speech at 2.45pm on day two of the conference, delegates were getting a bit tired and looking for something a bit lighter.
The fact that I was asked to speak says a lot about the lack of consumer rabble-rousers in Australia at the moment, so the title was designed to fuse together consumer and shareholder issues. It was called: "The Radical Consumer. How do you deal with the radical shareholder - the merging of the shareholder and the consumer."
ASIC chairman Alan Cameron was due to follow with a speech titled "The Active Regulator", which was just too big an invitation to miss.
Crikey's view has long been that ASIC has been too weak, partly because Alan Cameron is not a kick-arse regulator in the style of ACCC chairman Alan Fels.
However, the exchange was quite rigorous and thoroughly entertaining for the audience. Alan Cameron responded by first telling the audience that "Stephen really is a hard act to follow".
However, in the circumstances he did quite well so let's deal with the points I raised one by one.
CRIKEY: Regulation has failed in Australia because we now have a rapacious monopoly in the ASX which is more interested in making money than supervising and fully informing the market. For instance, it is outrageous that anyone wanting live company announcement has to pay 35c each and every time.
ALAN CAMERON: Yes, there are issues still to be resolved with this now that ASX is a profit-making body but at least ASIC now has a formal supervisory role with ASX's operations. That said, the relationship remains "unclear in the law".
CRIKEY: The American SEC is kicking butt with initiatives such as forcing accountants to divest their auditing functions and forcing companies to disclose all information they tell analysts immediately to the market.
ALAN CAMERON: The Americans are just catching up with Australia on this. (This is certainly news to Crikey but that is all the ASIC chairman said.)
CRIKEY: ASIC may have jailed 160 people since it was formed in 1990 but the only big fish that spring to mind are Alan Bond and Western Women boss Robin Greeburg.
ALAN CAMERON: Yes, most of them are unknown financial adviser types but what about Macquarie Bank insider trader Simon Hannes and the boss of Compass Mark II Douglas Reid. (Good answer Al, I should have remembered those two.)
CRIKEY: The treatment meted out to Rene Rivkin was pathetic and there is no way the guy should still be in business after he recommended five stocks in his tip sheet and then sold large holdings in them to his clients without telling them.
ALAN CAMERON: Stephen has no restrictions in what he can say and the names he can name. Whilst I'm "tempted" to respond "I will have to resist naming Rene".
The issues that Cameron did not respond to
The two issues that Crikey raised and Big Al did not respond to were the question of why listed trusts such as Westfield did not have to have annual meetings and how brokers such as Macquarie Bank could get away with giving their executives large slabs of shares in floats that should have been reserved for their clients.
Further issues that we would have raised given time
Why do British directors have to declare any dealings in shares to the market within 48 hours yet in Australia they have two weeks to fess up?
Similarly, why has ASIC just passed an amendment to the law that allows directors to vote that a fellow director can remain in the room for a discussion on a related-party transaction.
Big Al defends our lazy fund managers
This one made me laugh because Al claimed we have vigilant fund managers that take action when necessary. He cited three example in Coles Myer, Goodman Fielder and Westpac. Sadly the last one of these occurred in 1995 and since then the instos have sat back and watched all manner of stuff ups with barely a blink of an eye-lid.
The corporate cop also latched onto my comments about the lack of democratic principles in board elections because companies always claim there are only as many vacancies as there are retiring directors. He said that when Coles Myer put an outside candidate at the bottom of the list and was planning to not even have a vote on him, the ever-vigilant regulator stepped in and forced the retailer to recast the voting order. Al would have certainly heard my strong words on the way companies such as Westfield Holdings censored my platform to go out on the notice of meeting so let's hope he works up a policy pretty quickly to stop this happening again.
All in all it was a very interesting exchange and the 200 conference delegates seemed to enjoy it. Several people including the Canadian Banking Ombudsman came up afterwards and said it was most interesting so it will be interesting to see what comes of it all. However, it would be too much to expect the newspapers to latch onto something like this so there readers will remain blissfully unaware of many of these issues.
Big Al finishes his term as ASIC chairman in a couple of weeks so it will be interesting to see what Business Sunday does with all this excellent footage they got.
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