Cramer, Telstra, Pratt and Peacock

Monday, October 8, 2007, 9.21am (just as Media Watch is starting)

Dear Mayne Reporters subscriber and a handful of extras,

It's not often that a raw prawn makes its way into a video but that's what you'll find in tomorrow's Mayne Report effort defending Macquarie Bank against CNBC raver Jim Cramer.

JIM CRAMER EMAILS US

Hilariously, I've just had the following email exchange with the great man, who founded Thestreet.com and is now famous the world over for this CNBC rave against the US Federal Reserve in August. Cramer's voice almost got as high-pitched as mine as he let fly.

From: Stephen Mayne [mailto:smayne@crikey.com.au]
Sent: Monday, October 08, 2007 2:32 AM
To: madmoney@cnbc.com
Cc: jjc@jjcramerco.com
Subject: Response from Down Under

Jim, you're coming the raw prawn at us happy Macquarie fans Down Under.

Hope you enjoy this video response to your Macquarie rave I've just posted on Youtube.

Regards, Stephen Mayne
Australian shareholder activist

From: James Cramer [mailto:cramer@jjcramerco.com ]
Sent: Monday, 8 October 2007 7:53 PM
To: 'Stephen Mayne'
Subject: RE: Response from Down Under

First, gratz to you on making a video!! Second, I think you should do them outside. Third I would change that color shirt because it is unflattering. Fourth, I think any business model that sticks overpriced assets into fund holders who don't know jack is, short-term, BRILLIANT! Fifth, those who sold at my suggestion caught a nice gain Friday into the sell and got out up 34%. Sixth, I have a problem. Unlike most journalists I actually ran money. I know the perils of this kind of commingling. Finally, you are hilarious and I would keep up the comedy act but please, please, stay away from peoples' money.

jj

NOW, A BRICKBAT FOR MACQUARIE

The deregulation of shareholder communication - whereby sending the annual report is no longer compulsory for Australian listed companies – is going to throw up a truckload of issues for our little venture because no-one else will be able to sit in judgment on what is left out.

It's only just twigged as to the important watchdogging role this will be when you own $500 worth of shares in 445 companies and elect to receive all communication with these stocks in hard copy.

For instance, Macquarie Bank is systematically not advising shareholders of the huge related party transactions in its funds, which are now running in the hundreds of millions a year. Surely if the governance of these funds was truly determined by the independent directors, as is claimed, we would see different policies across the group.

Nope, instead it's a case of systematic non-disclosure – unless shareholders are diligent enough to go surfing through the fine print of the full financial reports online.

I've given Telstra a solid spray in this video for pulling on a similar stunt. What sort of company proposes a resolution to lift the cap on non-executive director pay from $2 million to $3 million and then sends out an abridged 32-page annual report to shareholders that can't find room to include what the directors were paid last year.

JAMES PACKER'S PROBLEM WITH CROWN

Melbourne's Crown Casino is emerging as an increasingly popular venue for AGMs. I'll be heading to The Reject Shop gathering this Wednesday afternoon and Pacific Brands has also opted for the gambling den in a couple of weeks.

However, Crown Casino controller James Packer seems a bit shy about showing off his wares. The Publishing & Broadcasting AGM has never been to Melbourne, let alone Crown.

James also chairs Melbourne-based Seek.com which held its first AGM last year at The Stamford on Little Bourke St. This year they have opted for The Langham at Southbank, which is a very short stroll from James' palatial office at Crown.

Surely James could have offered up free parking and a free room at Crown to save the Seek shareholders some cash. Maybe he's a little embarrassed about one of the world's biggest casino complexes – or maybe the Seek founders want to keep their distance.

JOUSTING WITH ANDREW PEACOCK AT MFS

Speaking of holding AGMs close to home, former Foreign Minister and Australian Ambassador to Washington Andrew Peacock is forcing his new friends on the MFS board to travel all the way down from the Gold Coast to join him for the AGM on 7 November at Melbourne's salubrious Park Hyatt hotel.

Peacock is chairing his first public company AGM and they really are trying to maximise numbers with this 9am start time. Thankfully, the diary is clear as I won't be heading to Sydney for Telstra that day, so there will be plenty of time to give the Kooyong Colt a thorough workout before heading to the Coles takeover EGM a couple of hours later at the Arts Centre.

Success in this exercise can be judged by whether MFS shifts the AGM back to the Gold Coast next year, rather than the six-star Park Hyatt, which is just a short stroll from Peacock's Victorian home in East Melbourne.

The Gold Coast property boys are known for taking big risks and living the high life, so it will be quite fun testing Peacock on the detail of their various adventures. Staying at Melbourne's most expensive hotel the night before sends a message to shareholders about the culture.

PRATT'S PLEA TO STAFF

Australia's third richest man, Dick Pratt, is about to take a huge hit in his settlement with the ACCC after confessing to running a box cartel with Amcor.

You just have to read this. It's the missive that the $5 billion man sent out this afternoon. It's been flying around the internet today and will no doubt be in all the papers tomorrow.

Don't you love this line:

"I have accepted responsibility for comments made by me to the then Amcor CEO Russell Jones when he invited me to lunch."

We're heading down to the venue of that lunch, the All Nations Hotel in Richmond, to make tomorrow's video.

There's also three radio spots tomorrow which will no doubt cover the Pratt mea culpa – Canberra's 2CC at 7.35am, 702 ABC Sydney at 9.45am and 774 ABC Melbourne at 5.40pm.

That's it for now. Keep chuckling about Cramer and do ya best.

Stephen Mayne