Australia’s hardest hitting business gossip has a smorgasboard of juicy morsels this week so click on.
Fresh from selling $85 million worth of PBL shares at the top of the market, BRW reckons the Federal Liberal Party Treasurer Ron Walker is worth $315 million, just above his former casino mate Lloyd Williams at $310 million.
BRW also mentioned a rumored $100 million fee for brokering a $2 billion deal involving the sale of Formula One racing. That would be about the same amount that Victorian taxpayers spent on the GP after Ron promised it would not cost more than $5 million.
Clearly Ron has got too much money having just spent about $10 million building a new mansion in Toorak complete with all sorts of bullshit extravagance such as “the same parquetry they have in the White House”. Ugh.
Anyway, Ron is obviously in need of somewhere to park his cash having appointed himself chairman of Onebank, a new outfit that will offer internet banking and attack the big bank oligopoly.
Ron has also appointed himself chairman of a new telco Equest, which is associated with Onebank, and surrounded himself with gaggle of influential types, some of whom, like Ron, wouldn’t know a conflict of interest if they fell over it.
Let’s start with Westfield’s Frank Lowy who is an investor in this linked Walker duo but reckons he can remain a Reserve Bank director.
Then we have Margaret Jackson who has emerged from John Gough’s shadow to become chairman of Qantas, but announced last month she was quitting Pacific Dunlop and BHP to free up her time.
Now we see that Maggie, who is Alan Jackson’s well-connected niece, has found the time to become deputy chairman of Equest. Given the connections with Onebank, surely that would raise question marks about her ANZ directorship.
Not so says Jacko, who seems to have been to the Nick Greiner school of conflict blind spots. Nick is so blind he couldn’t see a conflict in signing on as chairman of internet retailer dstore at the same time as he was deputy chairman of Coles Myer. Some people never learn.
Malcolm Turnbull The Big Vodafone Loser
Poor old Goldman Sachs, the world’s biggest millionaire factory, are lumped with Malcolm Turnbull as their chairman in Australia and now haven’t got the Vodafone float around which to build a big business Down Under.
The $2.7 billion float was the biggest ever to be pulled in Australia after the prices being paid for mobile phone businesses dived from as high as $20,000 a customer in February to less than $8000 a customer now.
If ever you want an example of a sheep mentality at work just look at the crashing tech and telco stocks, which is most pronounced in the mobile business.
There are not too many CEOs in Australia who will deal with Malcolm Turnbull so the sooner New York hands over his $20 million Goldmans severance package and sends him on his way the better.
One loser from the pulled Vodafone float is Phil Cornish, the man who was in the right place at the right time when Vodafone picked up the third mobile phone licence in the early 1990s.
Cornish almost went under with his Tasmanian phone equipment company Exicom but hitched his bank account to 5 per cent of Vodafone Australia and was looking at a stake worth almost $400 million in February at the top of the boom.
Now his 50.1 per cent stake in Mobile Communications Holdings, held through Cellular Custodians, is worth about $250 million. MCH’s only asset is its 4.5 per cent stake in Vodafone Australia and Phil’s only asset when the licence was issued was apparently his Australianness and some useful government connections.
A Carnegie Marries A Rockefeller
One of the weddings of the century took place in Washington this weekend.
James Carnegie, the dashing youngest son of former CRA boss Sir Rod Carnegie, married a billionaire heiress going by the name of Valerie Rockefeller.
This is certainly a case of James marrying up because Valerie is the great grand-daughter of Standard Oil founder John D Rockefeller and her dad is a Senator.
Sir Rod normally rings Crikey and gives us a good briefing on such things but we couldn’t get hold of him this weekend so details about the wedding are a bit scarce.
James works in Macquarie Bank’s Sydney office and with his newfound connections shouldn’t take took long to ratchet up his first million working for Australia’s biggest millionaire factory.
Is Ted Pretty Dodgy
After weeks of hand over mouth whispering, the allegations against Ted Pretty and his mate Peter O’Connell finally surfaced in the Fin Review on Tuesday.
Adam Shand, not long back from Zimbabwe, marked his return to Australian mainstream journalism with a terrific read on the whole saga which everyone dutifully followed up the next day.
The worst of the allegations were that the Pretty-O’Connell super fund was dealing profitably in Solution 6 shares shortly before Telstra took up a 15 per cent stake and drove the share price higher.
The allegations by Indian and Packer henchman Ashok Jacob that O’Connell asked for a $10 million fee to act for PBL in Telstra’s takeover negotiations also looked pretty ordinary.
The problem with Telstra is that it is controlled by a dying government with close Packer connections and it has chairman in Bob Mansfield with equally close Packer connections. The CEO Ziggy Switkowski appears beguiled by the legendary Pretty charm so there isn’t really anyone there who can step back, look at the facts and act sensibly.
Crikey’s instinct is to back anyone who stands up to Kerry Packer and it was Pretty who recommended against the $19 a share takeover bid by Telstra. This has saved all shareholders about $4 billion in losses and thank god it never got off the ground.
That said, the Solution 6 share dealing and O’Connell fee saga is too hot to dismiss.
NSW Budget Blowouts And Power Crisis
The legendary spinners in the NSW Right put on another masterful display of their craft as NSW Treasurer Michael Egan was widely applauded for yet again producing Australia’s biggest spending and biggest taxing state budget.
When Bob Carr got into office, Victorian taxes were about 10 per cent higher than those in NSW. Now that situation has reversed.
Power dividends to the NSW budget are set to tumble another $200 million and the prices that power companies are fetching is diving.
Look at poor old GPU in Victoria which paid $3.7 billion for its electricity and gas transmission businesses and received offers for not even $3 billion last week. Needless to say they pulled them off the market to save themselves the embarrassment of a huge write down.
Isn’t it great to see foreign companies getting done like dinners after buying assets from an Australian government. Victorians pocketed almost $30 billion for their power assets and if we did the process again now the figure would be closer to $20 billion.
This is where the NSW unions completely shot themselves in the foot by blocking the Carr government’s power privatisation plans in 1997. If that had been allowed, NSW would now be almost debt free.
Instead, the state is more hocked than any other, is suffering further Olympics blowouts and has the highest taxes in the land.
If the NSW Liberals weren’t so pathetic, Carr’s mob would have been thrown out in 1999.