Welcome to this bumper February edition of The Mayne Report.
Whilst there have been some specialised updates
since, the last bumper edition was the January 12 floods special
from Noosa. There's plenty of juicy material below, but if not interested or totally offended, you can always unsubscribe from this email list by clicking here.
Should Fairfax buy Business Spectator?
Mark Day had an interesting column
today speculating on what new Fairfax acting CEO Greg Hywood will do if he gets the gig permanently.
Right down the bottom was the following:By developing new products and revenue streams, Hywood will inoculate Fairfax against the demise of print. He can also do this by acquisition. There is speculation he will make an early bid for the rebel Melbourne real estate publication
The Weekly Review, part-owned by former Age advertising boss Antony Catalano. This publication has stripped $20 million in revenue from The Age.Also said to be on Hywood's shopping list is the
Business Spectator website, owned by former
Age journalists in partnership with Eric Beecher's
Crikey – also a possible buyout target.
Lo and behold, Fairfax has appointed
Hywood permanently this morning and chairman Roger Corbett fuelled speculation with the following comment: “In the near future the CEO will be announcing a number of key appointments that will ensure our combined strengths of quality independent content and digital technology provide us with a range of growth opportunities.“
I haven't spoken to anyone about this but agree with the strategy of Fairfax attempting to buy both Business Spectator
and it's sister publication The Eureka Report
However, it won't happen unless the two blokes running The AFR
, Michael Gill and Glenn Burge, are given the boot, which is something Mark Day is predicting.
The other "social issues" problem would surround Beecher's relationship with Corbett, which is clearly poisonous given the jihad Beecher has run against the former Woolies CEO. Some of the background was explained in this Crikey piece by Beecher
Whilst I've never discussed this directly with Eric, he sounds bitter that his consulting advice was ignored after Fairfax bought Text Media.
Ever since then his business strategy has been to undermine Fairfax in every possible way. He's done a good job at that, but at some point you need an exit strategy.
The likes of Stephen Bartholomeusz, Alan Kohler, Robert Gottliebsen and Eric Beecher are all fabulous performers but they are getting a bit long in the tooth. They need an exit strategy. More importantly, Fairfax needs them, especially with the likes of Gina Rinehart sniffing around potentially attempting to exert inapproporate influence over Australia's most venerable and independent publishing house.
As an independent observer, I'd like to see a deal with the following terms.
Crikey remains separate and independent, but Fairfax buys Business Spectator
with a solid lick of stock, plus a cash earn out and generous contracts for the main players. Beecher joins the Fairfax board, Kohler regains his rightful place on the back page of The Weekend AFR
but slows down a bit.
AFR.com is shut down and rebranded AFR Business Spectator
. Eureka Report
continues in its current form but there is close co-operation and collaboration with Fairfax's Money
and personal finance sections which have somewhat lost their pre-eminence with the closure of Shares
magazine and Personal Investor.
This deal would also allow the key players to be paid proper salaries, rather than offering subsidised services because they part-own a high risk internet publishing house in conjunction with a couple of big talking corporate players.
A sale to Fairfax would also end the unfortunate situation of having two aggressive investment bankers, namely John Wylie and Mark Carnegie, sitting there as part-owners of the Beecher-Kohler media stable. As is discussed further below in relation to the controversial NSW power sales, those lads present plenty of conflicts for the Business Spectator
crew and it is not a relationship which should continue. * Disclosure: Stephen Mayne is a freelance contributor to both Crikey and Fairfax and these observations are utterly independent of all the players.Alumina avoids a board tilt by appointing first female director
Alumina became the latest ASX50 company to fold and appoint its first ever female director on Thursday, so congratulations to Emma Stein. The former UK utility CEO has been elevated to the top 20 in our female directors list
given that she's an absolute rarity with 5 different public company gigs, namely Clough, DUET, Programmed Maintenance Group, Alumina and Transfield Infrastructure Fund.
Check out the Alumina announcement
Whilst it may not have been directly related, this development came a few days after I'd called Alumina chairman Don Morley to specifically discuss this issue. I said nothing about a coming board tilt but have run before and signed off by saying I'd be sending something through shortly to company secretary Stephen Foster, a Manningham boy who used to play junior tennis locally back in the 1980s.
However, there was a specific reference to Alumina's blokey board in this Crikey story
on December 23 as follows:Several companies such as Reece, Newcrest, JB Hi-Fi, Adelaide Brighton, Nufarm and Incitec Pivot have been placed on notice that if no females are appointed in the next few months, a hostile board tilt (possibly from a feral feminist such as Catherine Deveny) could be coming their way in 2011.The same applies to Melbourne-based Alumina, which is chaired by conservative 70-year-old Donald Morley, who spent many years as Hugh Morgan's finance director at WMC. Nominations close in March for this year's Alumina AGM, so the clock is ticking.
It took a fair bit of huff and puff, but congratulations to Alumina for seeing the light. We've had half a dozen AGM encounters with Don Morley and last year's report
shows how willing the Alumina AGMs can get.
Whilst Don does remain on my list of the top 10 directors who should retire
, we'll certainly be giving him a much easier time this year and may even skip the AGM altogether now that his resistance to female directors has ended.
It should be noted that the Alumina vacancy emerged due to Ron McNeilly's resignation for health reasons and we're all hoping the resting Worley Parsons chairman and former BHP Steel CEO makes a speedy recovery.Women candidates needed to target all blokes boards in AGM mini-season
The mini-AGM season for company's with December 31 balance dates is fast approaching and we're looking for women to nominate for a variety of boards.
Here's a list of prospective all-male targets:Adelaide Brighton:
still no women on the board after 9 months of leadership from new chair Chris Harris. AGM is being held on May 18 in Adelaide and we're engaging with the company at the moment, although have been playing phone tag with chairman. See audio and transcript
from last year.APN News & Media:
despite last year's protest against chairman Gavin O'Reilly, there has still been no meaningful change and there are still no women on the board. This article
in The Australian
summarises the debate. In 2010, Kevin Luscombe, Ted Harris and Gavin O'Reilly were re-elected
and in 2009 it was Vincent Crowley, Pierce Cody, Donal Buggy and Peter Cosgrove with substantial protests
against all the Irish associates. In 2008, the only directors re-elected were Gavin O'Reilly and John Maasland with another substantial protest
against the Irish representative. This suggests it could only be new director John Harvey and John Maasland up for election in 2011. Last year was April 30 at the Westin Hotel in Sydney and the 2011 AGM will be held on May 3. See Crikey
article from 2007 about the day private equity bid failed. These blokes need a female director so please email Stephen@maynereport.com
if you're interested in running just to help highlight the issues.Austar:
never had a female director and still don't have an AGM date for 2011 but have been exchanging emails with them and they would by now suspect a board tilt is coming. Just need to resolve who the candidate should be.Australian Agricultural Company:
May 19 at the Powerhouse Museum in Sydney last year and waiting to hear back on this year. After all the recent board battles this would be fun to attend, especially seeing as they have never had a female director.Bell Financial Group:
They scurried off to Sydney for an April 21 AGM at KPMG last year after we asked plenty of questions at the 2008 and 2009 AGMs in Melbourne. Have emailed asking for a Melbourne AGM this year and whether they will end the all male affair on the board but they have still not replied. See package of highlights
from previous exchanges. Boart Longyear:
9am on May 11 at the Museum of Sydney last year which was hardly conducive for a big turn up. A Macquarie-sponsored shocker which used to be chaired by BCA chair Graham Bradley and has had some big remuneration protests in the past. Would be nice to attend when get dates, especially given it's an all blokes board.Coal & Allied:
was April 16 at the Westin Hotel in Sydney last year and have still never attended one of these. Emailed about details. An all blokes affair so keen to put the pressure on.Macquarie Atlas Roads:
the international division of the old Macquarie Infrastructure Group which is having its 2011 AGM on April 12 in Sydney. An all blokes board so hoping to attend and would love to run a candidate.Catching up with James MackenzieThe Australian's
Damon Kitney produced an interesting feature article
on Mirvac, Pacific Brands and Gloucester Coal chairman James MacKenzie in January which included the following:MacKenzie's associations in business have also raised eyebrows in some quarters. At the most recent PacBrands annual general meeting, shareholder activist Stephen Mayne questioned whether CEO Sue Morphett's presence at MacKenzie's wedding meant they were too close for him to properly negotiate her new employment contract.Mayne also pointed out that Flavia Gobbo went to university with Morphet's partner, McKinsey & Co executive Charles Sitch. McKinsey was the consultancy firm whose review recommended PacBrands' move offshore and Mayne asked whether Sitch had been removed from the project. The response was vintage MacKenzie."Now I don't know where you are going with this at all, Stephen," he boomed. Mayne then left the meeting.
My recollection is that there was no "boom" in the exchange and leaving had nothing to do with the exchange but was because the Tabcorp AGM in town had already started.
Here is our brief account
of the 2010 PacBrands AGM. I'm catching up with James MacKenzie this afternoon for a discussion about what happened and his general campaign to "reform AGMs" as was outlined in the Kitney profile.In defence of public company AGMs and proposed executive pay reforms
It took four days, but The AFR
did run the following letter on January 25 (apologies for earlier version saying it never appeared) which was a response to another attack by the Directors Club on the proposed Productivity Commission reforms on executive pay through our financial daily."Two strikes" pay reform will energise AGMsDid Chartered Secretaries Australia CEO Tim Sheehy really say (“Pay reforms unnecessary, say experts”, January 21) the proposed “two strikes” rule on executive pay means “the AGM will become even more of a waste of time”.I've asked questions at almost 400 shareholder meetings since 1998 and believe the threat of a board spill after two successive 25% against votes on the remuneration report will energise AGMs like never before.The most important function of the AGM is for shareholders to formally decide, based on past performance and the proposed strategy, whether to re-appoint the directors. The biggest problem is that the average Australian director gets re-elected with 96% of the vote in favour, regardless of their performance.A single shareholder with just 5% of the stock, or 100 small shareholders, can already spill an entire board at an AGM or EGM. But these tools are rarely deployed.Peter Costello's non-binding vote on the remuneration report was an excellent reform for the Australian market. Shareholders are regularly voting against in numbers but then fail to follow through by voting against the directors responsible for the excessive remuneration practices.
Look no further than the 2009 Qantas AGM where CEO Geoff Dixon's $12 million package in 2008-09 triggered a 42.56% vote against the remuneration report, but remuneration committee chair James Strong was re-elected for another 3 year term with 97.3% in favour.
It is ridiculous that the vast majority of ASX200 CEOs earn more than all of their non-executive directors combined. The proposed “two strikes” reform will hopefully give the Directors' Club some spine to resist the demands of increasingly greedy CEOs. And watching this play out at AGMs will be fascinating.Stephen Mayne
TemplestoweA meeting with Santos chair Peter Coates
Santos completed a $500 million institutional placement
at $12.55 a share on December 20 and immediately got itself onto our SPP shame file
when it failed to follow through with an equivalent share purchase plan offer for retail investors. We emailed the boss of investor relations at Santos and he justified this discriminatory move as follows:Hi Stephen,
The placement represents less than 5% of shares on issue. Santos was able to price the placement at a 1.2% discount to the preceding 5-day volume weighted average share price. This is a very small discount for an equity raising and therefore is in the best interests of shareholders overall. Santos won't be offering an SPP.
The date and venue for next year's AGM haven't been confirmed yet.
Regards, Andrew Nairn Threatening a Santos board tilt if no SPP as institutions make $40m in a week
My reply was swift, very much to the point and new Santos chairman Peter Coates was copied in:Hi Andrew, I've just read you response and am very disappointed Santos is refusing to do an SPP given what has become reasonably standard market practice in recent years.
Santos has now been added to this shame file of companies that do placements without a follow through SPP for retail investors:
The facts are pretty clear. You've done a presentation around a price-sensitive announcement on December 17 which has clearly led to a re-rating of the stock. This notion of a 1.2% discount is not correct.
The privileged insiders who bought the new stock at $12.55 are currently enjoying paper profits of about $40 million or 8%. This represents a direct transfer of value from non-participants, including your 110,000 retail holders. No wonder it was heavily over-subscribed.
I can see no justification why the undisclosed clients of JP Morgan and Morgan Stanley should benefit in this way.
Besides, your retail investors would support an SPP without requiring any underwriting or co-ordinating fee to be paid.
Could you also please advise how much shareholders have paid to JP Morgan and Morgan Stanley for the privilege of being diluted in this way.
If Santos is not prepared to offer an SPP like most other companies do in this situation, then I shall stand for the board at the May AGM on a platform of fairer representation for retail investors.
In order to avoid such a scenario, I'd ask that you provide a copy of this email to all directors for discussion at the next board meeting and that a compensating SPP be announced before the deadline for nominations.
If not, could you please advise the date by which nominations must be received and the requirements Santos has for an external nomination to be accepted.
Please note that I've copied Stuart Wilson, CEO of the ASA, into this email.
I do hope this unfortunate situation can be resolved expeditiously through the board recognising that retail shareholders should not be so blatantly disadvantaged by a major Australian public company.
The current situation is that I'm meeting with Santos chairman Peter Coates early next month in Melbourne, but Santos are yet to confirm a date for the AGM so I'm not sure whether to lob a conditional board tilt which will be withdrawn if the SPP comes through. This tactic worked with the Westfield board in 2009 when they belatedly announced an SPP after a placement in exchange for uncontested director elections at the AGM.
Mr Coates has given no indication whether he's open to persuasion at our March meeting. It would be disappointing to get suckered into not running and then be told to get stuffed by the chairman after the deadline for nominations had closed.
The mandatory board tilts against companies which blatantly shaft retail investors has led to less rip-offs over the past year, so there's no way Santos can get away with this.
Afterall, the stock is now up to $14 so those lucky recipients of the placement are enjoying gains of $56 million.
If any directors out there want to know how an SPP-related board tilt plays out, here is the coverage from the 2009 Ten Network Holdings
and 2009 NAB
AGMs.The Cornwall collection
Former Fairfax and Crikey cartoonist Mark Cornwall has been contributing to The Mayne Report
since March 2009. Here is a collection of his best cartoons
and there are now also some amusing animations
I'm tempted to show this one to Mirvac chairman James MacKenzie when we catch up this afternoon.Rio Tinto board tilt lodged
We lobbed a board nomination
at Rio Tinto last year and they played a very deceptive game by not informing me the requirements hadn't been been satisfied until after nominations had closed, even through this was expressly requested. What didn't they understand about the following in last year's nomination letter:"If there are any outstanding qualification issues pursuant to your constitution could you please inform me of those before the deadline for nominations passes."
The detail was all explained in this Crikey story
at the time.
Rio should therefore not be surprised that a nomination was last week lobbed for the upcoming 2011 AGMs in London and Perth. The platform submitted reads as follows:Mr Mayne believes the Rio Tinto board has not been held accountable for the folly of paying an enterprise value of $US44 billion for Alcan. Only three new directors have been appointed since 2007. Where is the boardroom accountability for the refusal to originally engage with BHP-Billiton, the excessive Alcan acquisition, the debt-laden balance sheet, the massively discounted rights issue, the purported bail out from Chinalco and the now-aborted iron ore joint venture with BHP-Billiton?
Mr Mayne also believes Rio Tinto needs to have more than three Australian-based directors given the Australian operations deliver a majority of group profit. There are political risks associated with treating Australia as a branch office, as evidenced by the Australian government's proposed Resources Super Profits Tax in 2010.
Mr Mayne believes Canada is over-represented on the Rio Tinto board and that in light of the Alcan debacle, former Alcan director Paul Tellier, aged 71, ought not to be seeking a further three year term at the 2011 AGMs.
Given it's history of sneakiness, don't be surprised if Rio censors the platform and declare "no vacancy". At the moment, the only response we have from company secretary Stephen Consedine reads as follows: "I confirm receipt of your facsimile dated 2 February and the separate facsimile dated 2 February from Ms Piccinini. We are reviewing your nomination proposal and will provide you with our response in due course."
Given the aforementioned Ms Piccinini has ordered a crackdown on shareholder activism travel expenses this year, I'll need to point to some donations in response to this edition in order to make the trip out west for Rio's Australian AGM in Perth on May 5. It will be a real stretch getting to the London AGM on April 14.
Knowing Rio they will probably continue their unfortunate tradition of not asking board candidates to address the AGMs, which probably means they would prefer not to allow an outside candidate to speak either.
Finally, check out the this video
about Rio Tinto made in the week before shareholders voted to approve the 2007 Alcan deal. I was a lonely voice saying they were overpaying back then, yet only last week London-based finance director Guy Elliott told The Australian
:"In the purchase of Alcan, we made something that was strategically on target – in the sense that these were long-life, expandable assets – but we paid too much for that. Much too much."
Exactly, so why are 11 of the 14 directors who approved arguably the biggest and most disastrous all cash takeover in history, still sitting on the board and treating Australia with contempt?
Now, let's look back at which Rio Tinto directors are likely to be up for re-election in 2010.
Last year we saw the two new directors - Robert Brown and Ann Godbehere - elected, along with four incumbents: Sam Walsh, Guy Elliott, Mike Fitzpatrick and Lord Kerr. As you can see from the results
, everyone got more than 99%, suggesting very short memories about Alcan indeed.
In 2009, it was Jan du Plessis, Sir Rod Eddington, David Mayhew, David Clementi and Andrew Gould and they call copped big protest votes with the exception of the new chairman. Check out the results.
This means that it will largely be the 2008 crop who are up for election this time around and they included former chairman Paul Skinner, former Alcan CEO Dick Evans, Yves Fortier, Paul Tellier, Vivienne Cox, Richard Goodmanson and Tom Albanese.
However, Skinner and Evans have departed and Fortier has already announced he'll be going after the 2011 AGM. That leaves only Cox, Goodmanson and Albanese as certainties to be up election.
The only other Rio directors who have departed since the Alcan deal were David Clementi and David Mayhew who both bailed after the 2010 AGM. Who should lead the Victorian Local Governance Association?
The Victorian Local Governance Association board elections
are on and last Thursday night we had a three hour session of mingling, candidate presentations and Q&A in a sweltering room at the famous Green Building
in Leicester St, Carlton.
Whilst credit rating agencies assign rankings to debt issuers, Triple J
has its annual hottest 100 songs and AFL clubs have their annual "best and fairest" awards, there is no such formalised critiquing service available for local government councils. There should be.
The same problem applies with public company directors, which is why I've put together these lists of the top female
and top male directors
to help shareholders assess who they should vote for.
In order to assist almost 500 voting members of the VLGA in their deliberations, we sent the following analysis to more than 1000 local government figures in Victoria on Friday: Assessing the candidates for VLGA elections
There are nine spots up for grabs on the VLGA board and electronic voting runs through until the end of this week.
There has been quite a bit of reaction but we hope most people will see it as an independent assessment. We also sent the missive to previous donors and paying subscribers and one responded as follows: Dear Stephen,
Having never heard of the VLGA, I was not so interested in reading your report. But I was interested in your dispassionate discussion of candidates. Nicely done.
I write as you have noted political affiliations. I would much prefer that councillors did not have political affiliations, however when they do, I think it important that this is known. Thanks for making the effort here.
Indeed, the outgoing VLGA President, Greens member Heinz Kreutz, objected to such disclosure during the candidates forum. He is said to have been a good President and deserves re-election to the board, but surely voters deserve to know the political affiliations of all candidates.
I've recommended former Port Phillip mayor Frank O'Connor out of the five Presidential candidates, partly because he is genuinely independent.
However, it should be noted that his most likely challenger, current VLGA Treasurer Samantha Dunn, is a member of the Greens. The web version
of the assessment has been updated to reflect this.Firing up our Youtube channel again
When The Mayne Report
first launched in 2007 we were posting daily videos on Youtube. Alas, the cost and time of in-house video production, plus the lack of any revenue, made this model unviable. Besides, daily videos wasn't necessarily the best way to campaign for better corporate governance through shareholder activism.
In the end, it made more sense to channel our efforts into appearing on other people's videos, such as these two appearances last year
on Ten's The 7pm Project
, rather than trying to build an audience from scratch.
However, when you look back at all the video we've got spanning our own productions, one-off interviews, profiles or lengthy interviews such as Nine's Sunday
program or ABC TV's Talking Heads
, the spots on Sky's Business View
and webcasts of AGMs, it turns out we've got a rather large library of material.
Cross-posting has become much easier now, so we have relaunched our Youtube channel
and hope you enjoy our many playlists of material. If you have the right app, you can view the videos on the go using any mobile device - free and easy, so subscribe today!Cornwall on the Queensland floods
===============================================Paul Bendat keeps the pressure on pokies
As usual, there's plenty of action on the pokies front.
The community had a big win when the owner of the Jan Juc Hotel withdrew his VCAT appeal against Surf Coast Shire's refusal to grant him a permit for 30 machines. Check out the coverage
in The Geelong Advertiser
Also, it was great to see The Australian
come out and editorialise in favour of compulsory pre-commitment in January. The editorial came the same day it did this story
on Paul Bendat's latest advertisements attacking ClubsNSW.
Interestingly, Paul copped another legal threat from the pokies pushers as is explained in this blog post
This followed a lengthy email exchange
with Fairfax advertising executives over the contents of the anti-ClubsNSW ad published in The Illawarra Mercury
Meanwhile, it didn't take long for Victoria's new Gaming Minister, Michael O'Brien, to disappoint anti-pokies campaigners with his lame proposal for voluntary pre-commitment. Paul Bendat explains all in this post
on his blog last Friday.
Finally, check out 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:
Alice turned 8 on Saturday and she took 35 cup cakes to school this morning to share with her class mates and teachers.Another five big bond issues by Federal Government in January
Considering that the Federal Government borrowed $57 billion in 2010, it was very strange to hear Reserve Bank governor Glenn Stevens make the following statement last year: "There is virtually no net public debt in the country at all in contrast to much of the developed world."
The Federal Government's own debt management website
currently puts the gross debt figure at $181 billion. It was $58 billion when the Howard Government was defeated.
Both sides of politics try to quote a net debt figure which includes the $60 billion held by the Future Fund. But this is outrageous double counting because Future Fund reserves are specifically set aside to pay for public service superannuation liabilities which are still more than $50 billion unfunded. The Future Fund really should be renamed the "Partially Funded Past Fund".
After all, at Manningham City Council we've just been hit with a $1.4 million bill to plug a small funding gap that emerged on our defined benefit schemes for longer serving workers. We'll be fully funding it promptly, unlike the Federal and State governments, with the notable exception of Queensland.
If anyone needs assistance on the debt questions, this list
tracks all bond and treasury note issues by the Labor Government since it was elected in November 2007. Whilst many people took all of January off, the Federal Government was busy as usual adding to the nation's public debts with the following bond issues:Friday, January 28, 2011:
$700m tender of 3 year bonds expiring in December 2013 were sold for an average yield of 5.03% and was over-subscribed 5.7 times. Friday, January 21, 2011:
$700m tender of 3 year bonds expiring in October 2014 were sold for an average yield of 5.28% and was over-subscribed 4.5 times. Wednesday, January 19, 2011:
$700m tender of 5 year bonds expiring in June 2016 were sold for an average yield of 5.36% and was over-subscribed 4.1 times.
Friday, January 14, 2011:
$700m tender of 2 year bonds expiring in November 2012 were sold for an average yield of 4.97% and was over-subscribed 4.2 times. Wednesday, January 12, 2011:
$700m tender of 3 year bonds expiring in December 2013 were sold for an average yield of 4.95% and was over-subscribed 3.6 times.
Say no to Challenger's Tweedesque credit proposalAn informed investor writes:
The listed Challenger Financial Group has an underperforming credit fund and they're offering to buy out
the unit holders with 20% cash and 80% in a 3 year annuity issued by their life company at BBSW – 50 bps which seems like a pretty bad deal given the assets usually yield BBSW + ~ 200 bps. Credit is also looking like one of the better performing asset classes over the next few years so Challenger will pocket all the upside with essentially cheap funding from the unit holders. It's not only David Tweed who is making lowball offers to frozen or struggling credit funds.What ever happened to the boys who caused ANZ a $1m loss on Paris Hilton party?
Remember the story of listed company CommQuest? It was one of our first columns
for Fairfax's Businessday.com.au and attracted more than 150,000 page views in 24 hours as we explained how ANZ lost $1 million on a couple of big talking entrepreneurs who tried to save their business by flying Paris and Nicky Hilton to Australia for a New Years Eve Party.
Have another read
- you'll laugh out loud.
So what ever happened to this dazzling marketing services company?
Well, it did what was expected. It went broke and got bailed out by Co-Investor from Sydney who fairly quickly booted the CEO. They eventually compulsorily bought out all shares for $0.006 in the dollar and it has since been privatised and delisted.
Lazard sued for their investment back (apparently on the grounds that their agreement was that the money could not be spent on Paris Hilton) and they settled for 20c-30c in the dollar.
A few of the companies were closed down, others were sold. Out of the 15 marketing companies operated by CommQuest at the peak, there are about 5 remaining and they appear to be well run now.
Revealed: world's biggest small portfolio
Below is our "world's biggest small share portfolio" with spreadsheets available if you click on the dates. The losses have reduced due to plenty of tax-loss selling
after some windfall gains
playing the angles on capital raisings as was explained here.
Anyway, we've put together a spreadsheet detailing the current portfolio:February 1, 2011:
portfolio of 650 holdings worth $29,259. Overall paper loss of $10,183 and average holding worth $45. Donate to help keep us goingThe Mayne Report
has wracked up $300,000 in losses (excluding gains from capital raising plays) since we launched in 2007 and it has been heartening to receive recent support from donors keen to keep our service going:
For instance, here is what "Les the banker" wrote in an email after donating $50:I feel I owe you more. Love your work. Appreciate the investigative work you do.
You have helped me make over 16k in the last two years in on two capital raisings. Pac Brands (a while ago) and Karoon Gas (which I luckily dumped all shares when I cashed in after the raising).
I have a family like you and we are on one income. The extra money has helped a lot. Tax has been banked away. I have only every bought 10 share purchases in my life, so I am a very small trader or buyer. Having people like you look out for us small guys is a good thing.
Best wishes to you and your family and also the guy who is looking for a job.
It has been nice to receive almost $10,000 worth of donations over the past year 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:Tracking former federal staffers - from sacked Victorian MP to senior Greek Minister
We're still tracking former political staffers in Canberra since Bob Hawke's election in 1983. Updates rely on emails to Stephen@maynereport.com
or use of the anonymous tips box
and here's an example of some fresh information:Dimitris Dollis:
a former advisor to Brian Howe and Mick Young back in 1988 and then later a state politician himself in Victoria until he was ditched by the Labor Party from his seat of Richmond shortly before the 1999 state election, partly because he spent too much time in Greece. His career reached a new high after the Greek debt crisis when he was elevated to Deputy Minister for Foreign Affairs in the Papandreou Socialist government. Check out his biography
on the official Greek foreign affairs website.
There have been a few other updates so check out the three lists below and send through any corrections or feedback:Tracking the former Hawke-Keating staffersWhere Howard staffers finished upWhere Rudd government staffers went
Meanwhile, here is some feedback that came through about a former NSW Labor staffer, under the subject line: "How political staffers rise and rise"Ryan Park used to be a Physical Education teacher at a local high school. He left that and went to work as a staffer to his local state MP, David Campbell who was Minister for Roads. He then went straight into a job as Deputy Director of the NSW Department of Transport. Now that the disgraced David Campbell is retiring at the election, Mr Park has been preselected for the safe Labor seat.
The Mayne Report Rich ListBRW
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. Below are our latest new or updated entries: Anthony Hakim:
major shareholder of Clear Telecoms which was sold for a maximum price of $24.5 million to rival M2 Telecommunications in early 2011.Dean McEvoy:
the 32 year old founder of online buying group Spreets who owned 42% when it was sold in early 2011 to Yahoo7 for $40 million.Justus Hammer:
a Sydney-based internet entrepreneur who was one of the major shareholders in online buying group Spreets which was sold in early 2011 to Yahoo7 for $40 million.Burgess sisters:
the furniture maker and businessman Ernest Henry Leonard Burgess bought the bulk of an 1121-hectare property north of Melbourne in 1979 for about $920,000 and his two daughters stand to collect up to $300 million out of a long term progessive sale to developer Stockland struck in late 2010. See The Age's coverage.Nicholas Garling:
the Morning Star Gold CEO topped up his stake to 29 million shares
in early 2011 which at the time were worth about $15 million.Richard Avery-Wright: The AFR
reported in early 2011 that he was a CFD trader who was aiming to sell his Mosman mansion for more than $7 million.Bradley Gordon:
after a run-up in the share price, the Intrepid Mines CEO cashed in $6 million worth of shares in early 2011 but retains a further 3 million rights.Prof Barrie Finnin:
a Monash university academic who is co-inventor of the technology behind the success of listed Melbourne-based pharmaceutical play Acrux Ltd.Peter de Rauch:
an entrepreneur who sold Eagle Lighting to a Swedish company for a reported $50 million in 2006 and in 2011 made a hostile tilt for the board of the North Melbourne AFL club.Scott Penn:
a healthcare entrepreneur who has owned the Manly-Warringah NRL club since 2006.Andy Penn:
the Axa CEO picked up $17 million courtesy of the $15 billion takeover by AMP and its French parent.Vivian Findlow:
listed in the top 20 shareholders for REA Group with 282,037 shares which were worth about $4 million in early 2011.Ian Wallace:
Perth property developer who is President of the exclusive Peppermint Grove Shire but has run into trouble recently with a residential development known as The Tuarts.More Cornwall
===============================================Updating the great power privatisation list as Keating pockets plenty from NSW deals
One of our most popular lists over the years with investment bankers has been this effort
listing every energy sector transaction since 1992 and the various advisers we can find who worked on the deals.
The recent controversial NSW power privatisation deals have been added to the great power power industry shuffle list
but it has been surprising that more effort hasn't been put into finding our who got what out of the estimated $200 million in advisory fees.
The political rockets have been going off in all directions over the past few weeks but there's an obvious angle which has been missed relating to the chief adviser Lazard which boasts Paul Keating as its local chairman
and recently signed up Lindsay Tanner as a "special adviser".
Lazard's Australian operations are largely run by John Wylie and Mark Carnegie who sold their boutique advisory business to the Wall Street firm a couple of years back.
This is where life can sometimes get interesting because Wylie and Carnegie are major investors in the well-regarded BusinessSpectator.com,
which potentially throws up all sorts of conflict of interest and disclosure questions.
For instance, I would have thought that Stephen Bartholomeusz, or his editor, would insist on a disclosure when he wrote this column - Hollow threats over NSW energy sales
- in January defending the sales process and prices achieved. There was no comment on whether $200 million in advisory fees was a fair deal for taxpayers.
Given the obvious connection between Keating and the NSW Labor Government, you would have thought that full disclosure of the Lazard contract should have happened by now.
Especially when the final tranche of sales were ditched last month due to their being no bidders. How much was Lazards paid for that advice? It was Carnegie and Wylie who advised Qantas through its ill-fated privatisation bid in 2008 and the success fee if that $10 billion deal had proceeded was a staggering $98 million.Cranking up the pressure on Murdoch's gerrymander and pay packet
If anyone out there has owned more than $US2000 worth of voting shares in News Corp for at least a year, we'd love to hear from them.
You see, we promised Rupert Murdoch another shareholder resolution proposing an end to his gerrymander, but unfortunately we haven't got the necessary shares to satisfy US requirements.
The last time we put up such a resolution it was supported by 60% of the independent shareholders or about $5 billion worth of stock.
News Corp wrote to the SEC to attempt to get it struck out but the US corporate plod took our side and shareholders got a chance to reflect on the Murdoch family's dodgy system whereby 70% of the shares on issue don't get a vote.
We'd love to do it again in 2011 but just need a shareholder to volunteer and step forward to be the named proponent. Please email any interest through to Stephen@maynereport.com
Rupert's outrageous $22m salary was also heavily criticised in this piece
for the Fairfax websites last week and we also wrote this Crikey piece
pointing out how the stock has under-performed for the last 18 years.
Finally, on Rupert, it was entirely predictable that this letter submitted to the Herald Sun
last month never saw the light of day:Yesterday's
Herald Sun editorial ("Share the pain of flood damage") was a cheap shot at hard working elected officials trying to deal with the flood crisis.
Why link a possible flood levy to business class travel, overseas trips and gold passes for some politicians?
Australia's politicians at all three levels of government are massively underpaid when considering their responsibilities and what goes on in the private sector.
Herald Sun proprietor and American citizen Rupert Murdoch should show the way by cutting his $US16.8 million annual salary, selling all of News Corp's private jets and then donating the proceeds to the flood appeal.
The Murdoch family's Bermudan-listed stake in News Corp is worth more than $5 billion so Rupert he can afford to be generous.
City of Manningham councillor
Crikey yarns since last edition
Mayne on donations: Vic Libs still richest political division in the country
February 1, 2011After a decade of under-performance, is it time for Rupert Murdoch to go?
January 18, 2011Tales from the talk circuit - OPI, Murdoch, cranky lawyers
We've already got a reasonably full dance card for speeches in 2011 and will be fronting an inner-city Rotary Club tonight. Check out this list
of some upcoming gigs.
After discovering that former County Court judge and current Office of Police Integrity chief Michael Strong was in the audience at a recent speech, I decided to give the Murdoch press an extra big spray for its outrageous campaign against his office.
The new Victorian Liberal Government are still threatening to make good on their promise to "abolish the OPI", but it would make a lot more sense to simply fold it into this new anti-corruption watchdog that is going to be created in 2011.
After all, Ted Baillieu is big on telling people that he owes no one because the major media outlets recommended a vote for John Brumby at last year's election. If that is so, why on earth is he reacting to The Australian's
biased and utterly self-interested campaign against the OPI?
And speaking of Murdoch, enough time has probably now passed to tell the story about a speech to some corporate lawyers in Canberra last year which turned very frosty when I started getting stuck into dodgy infrastructure vehicles listed in Bermuda.
One chap took great offence to any criticism of Bermuda and pompously declared that "I wrote the Karlholt prospectus
This, of course, was the "float" which Rupert did of his family's holding in News Corp on the Bermudan stock exchange to avoid a big lick of Australian stamp duty as part of the 2004 move to America. It was a Crikey exclusive
at the time which is well worth revisiting.
The atmosphere didn't get any warmer when this lawyer's legal partner then declared that he'd known Twiggy Forrest for 20 years and my dismissive attitidue to his success was an insult.
My sarcastic response was along the lines that Twiggy had been "remarkably successful in getting Burke and Grill to win various government approvals in record time and single-handedly creating a Chinese iron ore boom".
This cheeky exchange didn't exactly win the cranky duo over so to try and ease the tension I went looking for a new questioner by saying: "C'mon has anyone got some difficult questions, we want some robust exchanges here."
After giving hundreds of speeches over the years, I can tell you that groups of corporate lawyers can be the toughest audience - especially after a few red wines.
Meanwhile, click here
to read feedback after some speeches and click on the image below if you fancy an engagement as the talk circuit is emerging as an important vehicle to help keep the The Mayne Report
going: Sign up for campaign and governance Tweets
Click on the image above to join more than 3300 followers on Twitter. We are regularly dropping out observations on breaking news, politics, council, share plays and activism developments. Here are some of our 2011 Tweets with some useful links:
Wow, QBE shares up 7% after revealing $US100m hit from Yasi. Announcement included some corporate deals in US which the market just loved. 5.11pm Feb 3
Just emailed this VLGA board candidate critique to 1000-plus council players: 4:43 PM Feb 3rd
Alumina have yielded to prospect of board tilt by appointing first woman, Emma Stein, to the board yesterday. Will now leave them alone. 1:12 PM Feb 3rd
Email from Rio Tinto company secretary: "We are reviewing your nomination proposal and will provide you with our response in due course." 1:09 PM Feb 3rd
Just faxed and emailed through a Rio Tinto board tilt. Was foiled last year so let's see how the tough London-based miners play it this year 10:55 PM Feb 1st
The biggest single non-union donor to SA ALP in 09-10 was the party-owned Colac Hotel which gave $92,000 courtesy of pokies and strip shows. 11:25 AM Feb 1
ACT ALP got 667k or 70% of total from pokies: 1.08pm Feb 1
Check out big mining donations to WA Libs:
Check out the biggest Federal Labor donors:
Comments are flying over billionaire pay packets yarn today. See:
Southern Cross Media to buy Austereo - one all blokes board bids $700m for another all blokes boards in the blokey world of commercial radio 1:42 PM Jan 30th
Fairfax just published this on Lowy and Rupe: 1:22 PM Jan 30th
Jan Jac Hotel withdraws pokies appeal. Important win stopping spread
Just exited $15,000 Maryborough Sugar share purchase plan at $3.41 for gain of $1240. Should be similar gain with Silex Systems next week. 3:29 PM Jan 27th
Excellent Australia Day with 400 attending Kevin Andrews' Menzies awards, Citizen of the year, RACV picnic and then citizenship ceremony. 11:17 PM Jan 26th
Just attended swearing in ceremony for new Manningham councillor Jennifer Yang. Things are looking up. 11:11 PM Jan 23rd
France imposes 40% female quota on top 2000 public company boards within 6 years:
How much did Paul Keating get of the $200m NSW spent on advisers flogging power assets? Keating chairs chief adviser Lazard.
Great seat in media area on centre court watching Lleyton - a rare perk from regular ABC radio spot with Lindy Burns. 11:38 PM Jan 17th
via Mobile Web Manningham mayoral election audio
Finally today, here are the audiio files from the delayed Manningham annual meeting when Liberal Geoff Gough was elected our new mayor:Speech by out-going mayor Charles PickGraeme MacMillan thanks Charles PickIvan Reid thanks Charles Pick
Geoff Gough's speech about Charles PickGeoff Gough elected mayor unanimously and his speechStephen Mayne's speech about Geoff GoughCharles Pick's speech about Geoff GoughDavid Ellis speech about Geoff Gough
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.