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A prominent Australian entrepreneur has filed this entertaining piece attacking new ASIC chairman David Knott and the discredited business establishment he likes to protect.

Dave’s peformance on Michael Pascoe’s Business Sunday today should give all shareholders in Australian public companies pause to consider why on earth they would risk investing anything in Australian public companies listed on the ASX. Or why they would not ring their broker first thing Monday to sell everything at best.

According to Dave, apart from NRMA, Harris Scarfe, HIH, (BHP? any others?), everything is just fine in the little Aussie investment pond. If Harris Scarfe and HIH came as a big surprise to Dave’s ASIC (which seems entirely likely, because he was very silent until they hit the wall), then how does ASIC and Dave know, to say nothing of the market, that there are no other turkeys in the flock?

What a stupid question. Dave was ready for that one. His answer is that there are no ‘entrepreneurs’ around now in public companies to worry about, so things must be fine in the fowl yard.

Dave, that’s just terrific, as in terrifying. We now know that the ASIC’s novice head thinks that Australian companies should shun entrepreneurs. What’s next Dave? A continuing witch hunt and purge of entrepreneurs in Australian companies by ASIC? An endless bureaucratic runaround the block by ASIC for anyone unfortunate enough to need ASIC approval to compete with the entrepreneur-free and competition-free zone that is Australian public companies and big business? Some trumped up ASIC ‘publicity’ show trials for little fish without the resources to fight back?

Not even the BCA, Business Cringe Australia, and Stan Wallis, would seem to agree with Dave. They apparently now recognise there are not many ‘entrepreneurs’ on Australian boards and would like to attract more, and rightly so. Even the BCA seems to see the need to replace some of the gravy swilling time serving wealth destroyers on the boards of Aussie big biz. Maybe the BCA has now figured out that scarce global capital will go first to companies that generate value. That means cultivating a culture of entrepreneurialism and informed and conscious risk taking and real competition among Australian public companies.

Someone who knows Dave might mention to him that what makes the US dollar strong is entrepreneurialism on a widespread scale. Memo Dave: an entrepreneur is not a C Skase or A Bond.

On a positive note, at least we’re getting some transparency. Foreign investors now know for sure about the stacked and fully informed deck at ASIC. And that’s before the ASX and APRA are ‘factored in’, so the insto jargon goes. And with the Prime Miniature reported in the Australian during the week as dining with one or more of the big bank chiefs at Mr Melbourne Ron Walker’s Toorak pile on Saturday 31 March 2001, including apparently the NAB’s Mr Cicutto and ANZ’s Mr McFarlane, any budding entrepreneur might want to factor that one in before taking on the big end to town. All above board (no pun intended) of course. Are you listening A Fels at the ACCC? The PM seems intent on making himself completely unelectable, but that’s another story.

What about the local instos? Should they be worried? Should they be a little more inquisitive? No mate, not all all. No inside info here. We all know what’s going on. Aussie instos are what is known as “index investors” in Australian stocks. They and their close relations the ‘analysts’ typically and uncritically lap up the PR from local ‘blue chips’ and invest in the “index”, even if the CEO of Blue Chip Enterprises can’t exactly explain the business model and the margins and the competition and some of those other worrying inconsistencies that all may not be as well as the party line from BCE would have the market believe. No, Aussie instos and analysts have learned it is in their own best interests to ignore a sustained smell of smoke and uncertainty from BCE until the music stops and BCE crashes and burns. After all, it’s not their money, and if everyone goes over the falls together, no-one gets hurt in the performance stakes.

So here’s a tip for you Dave and the local instos and analysts. It’s actually a global digital tip especially for all investors in the ‘index’, Australian and foreign alike. Any time an Aussie big biz CEO feels the need to come calling on you in person with the ‘true’ spiel and spin on the state of affairs at his Blue Chip GCHQ, and that his shareprice is ‘undervalued and misunderstood’ give him the digit and refer him to Dave before your clients and the market at large get indexed. Dave will also be able to check if the ABB CEO has released his true S and S to the market through the ASX. Any takers for bets here?

And Dave, just so you and the market do get to find out what is going on before it all ends in tears, entrepreneurs or not, why not impose without delay (no Dave, not 3-5 or more years on the ASIC Yannon time scale, try three weeks, in time for the June 2001 quarter) the detailed quarterly reporting that the US Securities and Exchange Commission imposes on listed companies, with the directors being personally liable for mistruths. That way we could probably dispense with the worthy and expensive Australian auditors who are worth their weight in the proverbial, to say nothing of the ASX. The merit of this suggestion will be in direct proportion to the howls of indignation and rage from the ‘biznuss community’.

Who’s betting that Dave will do anything so entrepreneurial? Who’s betting the Prime Miniature would let him?

Peter Fray

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