Global Integrity Summit, AGM season, council update, pokies, Macquarie capital raise, Perth Lord Mayor and some family news

December 19, 2015

Dear Mayne Report readers,

Greetings for the first time since our last bumper email edition on April 30. If you'd rather not receive these increasingly rare email newsletters, click here to unsubscribe.

Griffith University and the Global Integrity Summit

It should be an interesting Tuesday and Wednesday in Brisbane this week as Griffith University pulls together its ambitious Global Integrity Summit. Tickets are still available.

There is a fascinating array of speakers and topics up for discussion. For instance, the first day is framed as "The Big Picture" with an opening keynote from Human Rights Commissioner Prof Gillian Triggs, who will be joined later in the day for a panel discussion about surveillance including Bret Walker SC, the Inaugural Independent National Security Legislation Monitor from 2011-2014. The Drum's host Steve Cannane will no doubt enjoy firing off plenty of questions as chair of this session.

I'm doing a day one Madonna King-chaired panel on press freedom with Maxine McKew, cartoonist Michael Leunig and The Australian's Queensland editor Shane Rodgers.

Day two is framed as The Integrity Roundtable and has a more international flavour. I'm doing an infrastructure panel with Nicholas Gruen and then will be chairing a corruption discussion with a lively panel comprising:
  • Dr Erna Witoelar, President of the Indonesian Consumer Foundation and of Consumers International. Former UN Special Ambassador for the MDGs and former Indonesian Minister for Human Settlements and Regional Development.

  • Victor Perton, Senior adviser, Oppeus International. Former Victorian MP and Victorian Commissioner to the Americas, senior adviser in the Australian G20 presidency supporting Australian Treasurer Joe Hockey.

  • Dr Attiya Waris, Senior Lecturer, Law School, University of Nairobi in Kenya. Visiting lecturer at the University of Rwanda and the University of Pretoria. Expert on democracy in Africa and senior advisor to the Tax Justice Network.
City of Melbourne transparency update

For those who ask, I'm now describing City of Melbourne as a Camelot council. Melbourne is going well and we've got a good and diverse range of councillors supported by excellent staff. Sure, there are always issues, but from a governance and transparency point of view we are blazing the trail like never before.

How so? Check out this comprehensive list of 48 different transparency, disclosure or governance reforms and initiatives that have been implemented over the past three years.

The word seems to be spreading as the race to be the next Lord Mayor of Perth even included a column in The West Australian from one of the two candidates last Saturday out-lining how Perth should adopt many of Melbourne's transparency practices.

However, there are always improvements that can be made on the transparency front.

City of Melbourne's 2014-15 annual report was released online recently and on page 72 it disclosed that the number of confidential items dealt with at Council or Committee meetings jumped from 25% or 85 in 2013-14, to 115 or 28% in 2014-15.

This spike is partly due to the $250 million renewal of the Queen Victoria Market.

Councillors voted blindly and confidentially at a special meeting earlier this month to short-list 5 un-named developers to joint venture on the car park and community infrastructure component, although we did agree to release this press statement after the event.

It has only been by reading the newspapers that we've found out who some of the short-listed bidders, although that assumes accurate journalism.

It was The Weekend Australian which first claimed that Grocon, Mirvac and CBUS were on the shortlist and then The Australian subsequently added Sydney billionaire Lang Walker into the mix.

Who is the fifth? As chair of the Finance and Governance committee at City of Melbourne, no one is telling me or any other councillor. Is this the way it should be?

When struggling to access information internally, one of the fastest ways home is to put up a motion calling for public disclosure of the information at hand. This way councillors find out stuff at the same time as the public.

A motion calling for the five short-listed parties to be publically named is planned for the October council meeting.

Transparency candidate firms as the new Lord Mayor of Perth

There is a two horse race underway for the Lord Mayoral role in Perth at the moment with long-serving incumbent Lisa Scaffidi being challenged by 28-year-old independent councillor Reece Harley.

If you like sub-scale tiddler councils, Perth is about as small as it gets in the mainland capitals with just 11,000 voters including 8000 residents and 3000 property and business owners who must be on the state electoral roll. Foreigners or east coasters with businesses or investment in the Perth CBD don't get a look in with this parochial system.

Whilst City of Melbourne has 120,000 residents spread across 37 square kilometres, City of Perth is just 8 square kilometres and is focused very much around the central business district, which tends to lose energy in the evenings when workers return to the suburbs.

Ballots went out at the beginning of October with a 150 word statement from each candidate and postal voting closes at the end of this week.

Given that the wealthy property owner Lisa Scaffidi has already served 8 years as mayor and almost 20 years on council, there is a sense that the energetic challenger just may pull off an upset.

Harley topped the polls when first elected in 2013 and knows the city intimately from having run small bar walking tours of Perth for many years.

Scaffidi has suffered negative publicity this year after a US corruption probe unveiled the fact she failed to declare a $16,000 junket provided by BHP Billiton which took her to the Beijing Olympics in 2008.

A local publication has also been running hard on some disclosure and complaints issues around the lord mayor's ownership of a major backpackers facility in central Perth.

Her property developer husband has also become embroiled in some untidy Supreme Court litigation involving loans to a family trust.

Interestingly, Cr Harley is running hard on a transparency agenda, which you don't often see in local government.

He is telling any journalist who will listen that the majority of Perth's long serving councillors (including a Julie Bishop electorate officer) continue to support City of Perth policy 1.9 which prohibits Councillors from providing “comment to members of the media on Council decisions or activities.” We need an Andrew Bolt campaign on free speech with this one as failure to comply can result in serious penalties. Talk about gagging politicians!

Cr Harley is the only existing Perth Councillor who hasn't dipped in to the $13,000 annual clothing allowance, which is on top of the $30,000 annual stipend councillors receive. This clothing fund can't be used for more worthy causes such as writing letters to voters. Truly!

He is also promising to promote City of Melbourne-style transparency with a range of searchable registers being placed on the currently uninformative City of Perth website.

Check out this informative News Corp feature on Harley, whose campaign received a major boost this week after the incumbent Lord Mayor was found guilty of "serious misconduct" by the WA Corruption and Crime commission.

Check out the full CCC report on those inappropriate undisclosed gifts here.

How fairly will Macquarie treat its retail shareholders?

The campaign for better treatment of retail investors in capital raisings continues.

Another letter will be going off to Macquarie Group this week after they once again refused to do a pro-rata raising and went with the placement-SPP combination to help fund the $8.2 billion purchase of Esanda last week.

That said, I've never before seen a placement go off at a premium to the previous closing price so congratulations to Macquarie for persuading investors to pay $80 a share in the $400 million placement when the closing price on Wednesday night before the trading halt was $77.84.

Here is the full history of Macquarie in terms of ordinary capital raisings over the past decade:

May-June 2006
A $700 million placement at $66 a share, which was followed by an uncapped $5000 Share Purchase Plan (SPP) for retail with a fixed price and no VWAP (Volume Weighted Average Price) alternative which only raised $9 million.

May-June 2007
A $750 million placement at $87 a share, which was followed by an uncapped $5000 SPP at a fixed price of $87 a share with no VWAP alternative pricing which raised $79.4 million.

May-June 2009
A $540 million placement at $26.60. Retail investors were offered a 5% discount to VWAP in the subsequent $15,000 SPP which didn't come into play as 55,000 investors took up $669 million worth of new shares at $26.60. The offer was uncapped and not scaled back, so it was a rare example of the retail class diluting institutions.

February-March 2014
A $500 million placement at $73.50. Retail investors offered a $10,000 SPP at the placement price of $73.50 or a 1% discount to VWAP which went at the placement price and raised $170 million with no scale back.

October-November 2015
A $400 million placement at $80 but just what will retail investors be offered in the coming Share Purchase Plan?

Retail investors were collectively diluted by the earlier SPP this year as only 18,000 participated and they were restricted to just $10,000 when more than 90% of SPPs these days are for the maximum $15,000 permitted.

Therefore, the Macquarie board should clearly go for an uncapped $15,000 SPP at $80, which leaves the only outstanding question being the VWAP-linked pricing alternative.

Small cap listed investment company Mirrabooka announced an SPP last week which will be priced at a 10% discount to VWAP. This is clearly too much for Macquarie but 1% was a bit skinny last time, especially when you consider the Millionaire Factory offered a 5% VWAP discount in 2009.

Over the past 18 months, here are some of the other VWAP discounts offered by ASX 200 companies:

GPT: 3%
Ansell: 2.5%
IAG: 2%
DUET: 2.5%

Surely Macquarie can do better than 1% given the way it has diluted retail investors in 4 of its 5 capital raisings over the past decade. I'd be happy with 2%, but it may all be academic with Macquarie shares up again today to $81.85. If this holds the SPP will be priced at $80 and then the question shifts to whether it is pitched at $15,000 and whether they apply any cap on the overall raising.

Tap into ASA's excellent research lists

Any retail investor worth their salt should be a member of the Australian Shareholders' Association and it was good to see the Herald Sun spell out the role played by the ASA in Saturday's paper. The ASA website has an interesting series of research lists, some of which are member-only behind the paywall. Here are a few favourites:

Longest serving ASX 200 directors

New CEOs who embrace write-offs

Biggest protest votes against directors in 2013

Measuring independent chairs for "skin in the game"

Capped SPPs which were then expanded

How retail investors do worse with separate bookbuilds

The 100 most important remuneration protest votes

31 examples of where retail investors gathered 100 signatures

ASA does not publish voting intentions reports free on its website. However, "subscribers" who merely give their details will get plenty of access so that's definitely worth doing.

And if you want to see all the research plus the full archive of AGM reports and voting recommendations since 2009, you really should become a member. Click here.

Garrett blows open pokies debate

Wow, didn't 7.30 have a fascinating story last week about Peter Garrett trying to recant his interview with a documentary team where he claimed to have received cash from the pokies industry when lining up with the NSW ALP.

The former Garrett staffer turned CBA spin doctor Kate Pasterfield is said to be the central player in how Garrett came to be taking two very different positions.

Kevin Rudd was right when he denounced the NSW Right as having their moral epicentre entwined with the gambling industry, best illustrated by the way casino billionaire James Packer hired Karl Bitar and Mark Arbib after they exited politics.

However, with Sydney Labor now out of office at all levels of government with the exception of a handful of suburban councils, the post-Obeid Labor Party machine in Sussex Street may yet develop some sounder ethical foundations.

It will be interesting to see how they respond to the upcoming documentary Ka-ching! Pokie Nation, which is being broadcast on the ABC in coming weeks.

All the rumblings suggest the doco pulls no punches and will turn the focus directly onto the evils of the addictive machines themselves, as opposed to the people and institutions who profit from them.

It is good to see the Municipal Association of Victoria getting on board the anti-pokies push which will be given renewed momentum by the airing of what could become the best known work of the late Neil Lawrence.

Finally, check out this 30 second anti-pokies ad made by Paul Bendat a few years ago featuring our daughter Alice, who was 6 at the time:

AGM season preview

The AGM season has got off to a pretty quiet start and at this stage we are not planning any travel, so Rupert Murdoch is scoring a year off.

After last year's logistically helpful back to back meetings for News Corp and 21st Century Fox in LA, Rupert has put some space and time between them this year with News Corp's AGM being held in New York on Wednesday (October 14) and 21st Century Fox in LA on November 12.

News Corp will be particularly interesting with another shareholder resolution proposing an end to the dual class voting structure. The United Nations Principles for Responsible Investment group sent out an update to members on Friday urging support for the resolution in the following terms:

"The Nathan Cummings Foundation and Hermes EOS are requesting signatories vote in favour of a resolution at News Corporation, calling on the company to take steps toward adopting a recapitalisation plan that would eliminate its dual-class capital structure. Dual-class structures can distort incentives and increase agency costs, and are also associated with poorer company performance."

Transurban's AGM is on now but I won't get there given travel commitments to Brisbane. So far this season, I've only made it to last week's Mirrabooka AGM to push for a first ever female director along with more fairness in capital raisings. Chairman Terry Campbell doubted he'd appoint a first female in time for next year's AGM so we're in the market for a female candidate to nominate and give them a hurry up.

Ansell proved quite interesting last week when the remuneration report generated a first strike and the CEO's incentive grant was easily defeated, which might explain why the voting results weren't lodged with the ASX until 2.33pm on the day after the AGM.

In terms of big votes against non-independent directors, Sonic Healthcare have been right up there in recent years, which might explain why they finally announced this board succession plan last month which saw chairman Peter Campbell and another veteran colleague agree to depart at the AGM after a combined 38 years of service. This shuffle will see it just a achieve a majority of independent directors with 4, who will balance the 3 remaining executive directors. Don't be surprised if the execs continue to attract big protest votes as they don't all need to be on the board.

The ASA has introduced an excellent new feature on its public website which gives details of the major upcoming AGMs it will be attending. Check them out and try to get along to a few as attendances have been dropping in recent years.

Donate to help fund some interstate AGMs

This missus won't permit interstate AGM travel these days unless they are funded by donations. If anyone fancies making a contribution, I'd like to attend these interesting Sydney AGMs in the coming weeks:

Fairfax Media: November 5 in Sydney and a good chance to welcome new chairman Nick Falloon.

Slater + Gordon: After giving them a good work out last year, the troubled Melbourne-based company has scurried off to Sydney for its AGM on November 19. Lots of questions to ask about this $1.3 billion Quindell acquisition in the UK.

Seven Group Holdings, Cabcharge and DUET Group: All three AGMs are in Sydney on Wednesday, November 18. Cabcharge has still not expunged the influence of Reg Kermode loyalists and DUET has the worst record in the ASX 200 when it come to doing institutional placements rather than pro rata capital raisings. Seven Group is interesting as Kerry Stokes has still not properly explained the oil and gas strategy which has so far delivered losses exceeding $100 million.

The Mayne Report has received more than $30,000 worth of donations over the past five years and if you fancy giving us a hand to help fund our attendance at the AGMs listed above (please cite your highest priority if possible), just click on the image below:

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44 Crikey yarns since last Mayne Report email edition

Apologies there has been no full service Mayne Report email edition since April 30. This is partly because the journalistic efforts have going into regular Crikey stories. Below are the links to all 44 Crikey contributions over the past five months:

Transurban cashes in suckering governments to buy now pay later
Monday, May 4, 2015

NAB shows Slaters, Stokes and Gerry Harvey how to do a capital raising
Friday, May 8, 2015

Companies which withdraw resolutions rather than face defeat
Monday, May 25, 2015

Herald Sun editor demonstrates anti-free speech culture
Wednesday, May 27, 2015

Stokes dilutes retail investors, lifts Seven stake by 6%
Wednesday, June 3, 2015

Macquarie board tilt related to better treatment of retail shareholders
Thursday, June 4, 2015

NAB shows everyone how to do a fair capital raising
Friday, June 5, 2015

ALGA shows disdain for governance and transparency
Wednesday, June 10, 2015

Inside the blokey Murdoch family succession plans
Friday, June 12, 2015

Eddington missing in action over secretive Murdoch nepotism
Thursday, June 18, 2015

Coalition jellybacks cave in to self-serving media oligarchs
Friday, June 19, 2015

Murdoch entrenches poison pill, shafts shareholder democracy
Friday, June 19, 2015

Why doesn't The OZ editorialise against Rupert's shareholder restrictions and market rigging?
Monday, June 22, 2015

Stokes forgives Kennett's anti-media past and indifferent public company record
Thursday, June 25, 2015

In support of governance reforms at super funds
Monday, June 29, 2015

Slater and Gordon could face a class action
Thursday, July 2, 2015

Time for citizen jury to sort out industry fund governance
Friday, July 3, 2015

The battle for greater political transparency
Monday, July 13, 2015

Macquarie stacks the deck against outside board challenger
Tuesday, July 14, 2015

Is Melbourne going to kill car share?
Friday, July 17, 2015

Another move by director's club to block board challengers
Monday, July 20, 2015

Macquarie hypocritically complains about excessive compliance costs
Friday, July 24, 2015

Pro bono piece on public sector enterprise agreements
Monday, July 27, 2015

Shareholder rights coming into focus
Thursday, July 30, 2015

Business brief on outcome of shareholder rights case
Friday, July 31, 2015

Big Four pay $20b pa in dividends, then ask for most of it back
Friday, August 7, 2015

How and why companies and banks shaft retail investors
Monday, August 10, 2015

CBA owes retail, but will it deliver?
Tuesday, August 11, 2015

CBA announces $3.6b dividend, asks for $5b back from shareholders
Wednesday, August 12, 2015

James Packer ends noble volunteering tradition
Monday, August 17, 2015

How Abbott made it hard for outside candidates at Medibank
Thursday, August 20, 2015

Victorians should not be so afraid of rate capping
Friday, August 21, 2015

Murdoch's self-inflicted wounds over NRL TV rights war
Monday, August 24, 2015

Murdoch needs NRL more than NRL needs Murdoch
Tuesday, August 25, 2015

Decision time for ANZ and CBA shareholders
Friday, September 4, 2015

Why does local government resist greater transparency?
Thursday, September 10, 2015

ACCC should block Foxtel's Ten move
Friday, September 11, 2015

CBA returns just $2 to non-participating retail shareholders
Monday, September 14, 2015

How will Turnbull handle Murdoch expansionism?
Wednesday, September 16, 2015

Inside amazing turnaround of Swisse Wellness
Monday, September 21, 2015

10 political reforms we should try
Wednesday, September 23, 2015

News Corp loses its shirt on Bolt's heavily subsidised career
Friday, September 25, 2015

Examining the gender records of AFL clubs
Monday, September 28, 2015

Murdoch family pay cracks $1 billion
Thursday, October 1, 2015

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From the member edition archive

If you're a relatively new Mayne Report reader, here are links to some of the more interesting email editions sent out over the past seven years.


Special edition on the Victorian election result
Sunday, November 30, 2014

Vic election, Herald Sun, Rupert votes, Tex, Xenophon and much morey
Sunday, November 23, 2014

Rupert AGMs, Cabcharge, Costello, Bolt, Ten and Victorian election
Sunday, November 16, 2014

CBA tilt, LA visit, Rupert AGMs, Cabcharge and state election
Wednesday, November 12, 2014

Cabcharge, donations for Rupert visit and governance reforms at City of Melbourne
Wednesday, November 5, 2014

Tilts, Fairfax, CBA, Brickworks, Albert Park, ASX, Woolies, pokies and Crown
Friday, September 20, 2014

We're back: inside a post-ASA election season blitz
Monday, September 15, 2014


Capital raisings, Ansell, IAG, Packer, pokies, Rich List, City of Melbourne and ASA update
Monday, December 23, 2013

Franking robbery, East West trust breach, BHP bonuses, John Gay and plenty more
Sunday, August 25, 2013

ASA policy paper, Kevin Andrews on the pokies, Senate preferences and much more
August 19, 2013

ASA, Billabong, Westfield, Newcrest, Shorten, Turnbull, pokies and then some
Monday, July 22, 2013

Rudd v Gillard, referendum, Labor sleaze, Clive Palmer, ASA, City of Melbourne and plenty more
Monday, June 24, 2013


Backing Rudd, Lachlan, Bob Brown media debate, Manningham governance, Gunns and St Kilda AGM
Monday, February 20, 2012

The OZ goes mad, Murdoch piracy, AFR, pokies double rate, Gina, council super, BoQ rip-off and power speech
Wednesday, April 4, 2012


Murdoch special, media inquiry, pokies, Manningham, Zara, secretive Shortenite crs and Vodafone take-down
Thursday, September 15, 2011

Elected to ASA board, pokies, Rio, Santos, RHG, Hartigan, Manningham, capital raisings and Rich List
Thursday, May 19, 2011


Paperlinx, Packer, Murdoch, Manningham, pokies, Rich ex wives, foreign takeovers and much more
Saturday, October 23, 2010

DJs, women on boards, ex Lib goes no pokies, preferences, Pratt-Shorten, Labor's debt and Manningham council audio
August 3, 2010

Director rankings, Rio, Westfield, MAP, Manningham, Paatsch, state election, rich list, pokies and much more
June 9, 2010

Political donations, Stokes, Westfield tower, Richard Colless, Manningham nursing home, state debt, Rich List and Grand Prix
February 23, 2010


Seven AGM, crazy Perth visit, Fairfax, Telstra, Transfield, capital raisings and much more
November 9, 2009

News Corp AGM, Packer, Fairfax, James Strong, Woolies, Eastern Golf, Kohler-Gatto and much more
October 20, 2009

Bad Bendigo, Mark Day, Manningham, pokies, NAB, Asciano, Rich List, Paladin and hostile EGMs
September 15, 2009

Macquarie AGM, Melbourne's decline, Asciano EGM, capital raisings, Goyder's pokies and AGM diary
July 28, 2009

2008 as the GFC hit and before we got overloaded at Manningham

71% backing at Centro, $11bn backing at BHP and huge Qantas protest
November 28, 2008

Combank's $700m ABC Learning debacle
November 13, 2008

Computershare AGM, Seven wash-up, audio highlights and ABC Learning chair under pump at Lend Lease
November 11, 2008

Toll board skewered over $55m executive rort
October 30, 2008

Transurban shareholder revolution - chairman almost defeated
October 28, 2008

A huuuuge day for Australian corporate governance
October 22, 2008

Rupert's accountability dodge, Macquarie's Italian hit, Babcock funds revamp, and rich lists.
October 20, 2008

BHP and Woolies tilts, AFIC push on Stan Wallis, ASX-Kohler yarn and new Rich Listers
September 26, 2008

Risk Metrics nails Macquarie and Babcock
September 18, 2008

Macquarie videos, Stokes raid, new board tilt, Oz Minerals, share trading and much more
July 25, 2008

Hegarty Payout rolled, history is made
July 18, 2008

Great debate at the Babcock AGM
May 30, 2008

Our liveliest edition yet
Thursday, May 8, 2008

Burrows quits, Rupert, donations, long-serving directors and much more
January 31, 2008

Markets tumble, Rupert book deal, Centro, Rich List, Xenophon, AFR tips and our buying spree
January 17, 2008


Fortescue Metals AGM: time for Twiggy and FMG to grow up
Sunday, November 8, 2007, 10.30pm

How $5bn worth of votes backed us against Rupert's dodgy gerrymander
Saturday, 20 October, 2007, 7.20am

Mayne family news: a new job and lots of kids sport

Paula has started a new job with a not-for-profit called InTouch which does great working assisting women and children responding to family violence from CALD (culturally and linguistically diverse) communities. Her brief is to manage and grow the legal practice, complementing the family violence outreach work done by a hard-working team of case workers.

InTouch is 30 years old with approximately 25 staff. There are 24 different languages spoken at the Centre and last financial year it provided extended support to 937 women.

Women from CALD communities face significant barriers to justice and with all the political discussion about family violence these days, better resourcing key service providers like InTouch is an obvious place to start for policy makers seeking to make a difference.

The kids had a great time playing junior football this winter.

Laura is 14 and already 5 foot 9. She played U15s in a team that finished 3rd, spent much of her time in the ruck and won the most improved award from the coach.

Alice was a revelation, coming second in the best and fairest in the U12s after missing the first three games with a fractured arm.

And Philip changed clubs to be with his sisters and ended up as lead ruckman in an U11 premiership team which won a gripping grand final by a point. There he is below giving a big scream going up for a ruck contest in the granny.

We also entered a family senior tennis team over winter comprising the three kids, dad and grandma. Paula even played her first ever game of competitive tennis.

It was the second lowest Saturday afternoon open sets section and we finished 5th in a 7 team field.

It was great for the kids to play everyone from hot-headed 21 year old men to canny 75 year old women and then sit around chatting during afternoon tea each week.

However, at 46, the old man's serving shoulder isn't what it used to be, particularly after over-doing it in the club championships a couple of weeks back. Here's hoping the last ace hasn't been served.

This summer will see lots of squad swimming training for all three kids and the girls have decided to give cricket a go with dad helping out with the coaching.

That's all for now.

Do ya best, Stephen Mayne

* The Mayne Report is an email newsletter and website which promotes transparency and good governance in the corporate, political and media worlds. It is published by Stephen Mayne, the founder of, shareholder advocate and City of Melbourne councillor. To unsubscribe from this email list, click here.