Crikey played Danny Board in pennant tennis this year and bad light stopped us at 5-5 in the third. A couple of weeks later he rang to ask if he could do a student essay on the ASX board tilt and this was the result of his efforts.

With three board positions up for grabs on October 29, Mr Mayne gained just 7.2% of the vote. The three outgoing directors, Jim Kennedy, Mike Shepherd and Clive Batrouney were re-elected were with over 99% support.

After the meeting Mr Mayne was unfazed by the result: “The odds are stacked against me. It’s not a democratic process.”

Gervase Greene, head of public relations for the ASX, was quick to disagree. “Mr Mayne has as much chance of winning as any other candidate. We make sure that all the potential directors have the same opportunity to address the meeting.”

There are 16,000 ASX shareholders and 100 of these attended the AGM. Much of the ballot was collected prior to the meeting via postal votes.

Close to a quarter of the shareholders chose to simply sign the ballot paper and send it in with no selection. “These votes are effectively donkey votes. The chairman can do with them what he wants. I’d need 99.8% of the actual votes to be competitive,” said Mr Mayne.

The ASX recorded a profit of $51 million in the year 2000/01, down slightly from the $53.6 million profit recorded the previous year.

ASX Chairman Maurice Newman asked the meeting to support a motion to raise the directors fee cap from $900,000 to $1.5 million.

“We have no plans to raise our individual entitlements. There are no plans to merge with any particular entity, but we need to consider that in the event of a merger we have very little to offer our non-executive directors,” he said.

Mr Mayne was not so sure of the Chairman’s line of thinking, and leapt to his feet, injecting a little humour into proceedings: “Surely Mr Chairman, you’re don’t expect us to believe that you would dare raise the cap while lowering your entitlements.”

Gervase Green noted that while the cap was $900,000, the directors are not currently drawing the entire amount. The motion to raise the cap was passed.

Mr Mayne raised the question of the $300,000 superannuation bonus paid to retiring directors who have served three terms on the board. There was some confusion amongst the board as to whether this bonus was included in the fee-cap. However Mr Newman took advice and informed the meeting that it was in fact a separate consideration.

The ire of Mr Mayne was suitable raised. “Non-executive directors should get paid on a month to month basis so that they can resign on a matter of principle. There should be no superannuation payouts. That’s one of the best rorts going around.”

Mr Mayne called on the board to make all company announcements for the past 10 years freely available to interested parties.

“We are currently charged 44 cents a page which adds up to big dollars for a major search.”

Mr Greene believes that Mr Mayne’s expectations are simply unrealistic. “Can you imagine how many pages a search on News Corporation announcements would produce? We have to cover costs. Mr Mayne charges the subscribers of crikey.com, doesn’t he? I’ll say no more on the matter.”

But it is not just the cost of information searches that has Mr Mayne hopping mad. “The ASX delay company announcements for 20 minutes. Share prices fluctuate markedly depending on the content of each company announcement. In this day and age they should post these on-line immediately for all to access.”

Mr Greene said that it is standard world practice to delay company announcements. “We sell the information to major information vendors like News Corp and Merrill Lynch. They repackage it and sell it themselves. The clients don’t like the fact that we make information freely available after 20 minutes but we have made a convenient compromise.”

I asked Mr Greene if he thought that there would come a day when this delay did not exist. “I think we are moving in that direction. When we have the technology available then we will move to real time. It’ll happen in the next few years.”

If this is indeed is the case, one wonders what kind of compromise the ASX would want to come to with clients like News Corporation. Only the Mexican stock exchange recorded a stronger result in the past financial year. Since floating the ASX in 1998, the directors have received bumper returns. Any move to real time would produce a loss of income for the ASX.

“There lies the problem. The ASX is worried about its shareholders and profits. There is an inherent conflict of interest,” Mayne said.

Mr Greene considers that the ownership structure since the ASX was floated is far preferable to the old system “Market integrity is our bread and butter. I laugh when I hear this argument trotted out. Before we floated in ’98 stockbrokers controlled the ASX. Do you think there was no conflict of interest then?”

Mr Mayne points out that in the UK any share trading by directors must be made public within 48 hours. I put it to Mr Greene that the 14-day rule in Australia should be reduced in light of high-profile corporate collapses like One.Tel and HIH.

“We recognise that there is a general concern in the community for transparency. We recommended that the time be reduced to 2 days but after dialogue with companies, we compromised on a 5-day limit.”

Mr Greene said the 5-day rule would take effect by the end of the year. “Getting Corporation Law changed in Parliament is a slow process. So we have lead the way with this reform by amending the listing rules.”

Mr Mayne is no stranger to controversy. After working as a political adviser to Jeff Kennett, the two became embroiled in a bitter public spat over the infamous jeff.com web site. Over 1600 interested parties subscribe to his on-line version of the drudge file, crikey.com.au. He has attended over 250 AGM’s and makes regular appearances on radio and television.

I asked Mr Mayne for his impressions on the day. “The ASX are pretty good, they let me speak at the meeting. But it is too easy for the ASX and other companies to justify their undemocratic processes with the line that it is common practice. ASX shares are one of the highest performing shares on the exchange and since the exchange was floated these directors have done very well, thankyou very much. They have an obligation to uphold their watchdog role and refer corporate crimes to ASIC.”

Observing the immaculately dressed Mr Mayne mingling with shareholders and current board members over a cup of tea and a muffin, it was difficult to escape the impression that he is viewed with a mix of suspicion and curiosity.

Gervase Greene said that the current board included the appropriate number and blend of directors. He refused to speculate on what kind of difference the outspoken Mayne would make to the policy direction of the ASX board, but added: “I’ve heard his rants on the radio. His platform tends to draw on anti-bank sentiment and other general policy positions rather than on the specific operations of the ASX.”

Mr Mayne argues that his position goes to the very heart of what the ASX should stand for. “The ASX has dropped the ball on its regulatory role since it floated in 1998.”

Mr Mayne said there was no independent experts report on BHP as required in the lead-up to its merger with Billiton. At the AGM he raised the $8 million share issue to the CEO of Santos John Ellice-Flint in December 2000. ASX Managing Director Richard Humphrey noted that the shares were issued before the official announcement of Flint’s tenure, in line with the listing rules.

Listing rule 10.11 states that a share issue to a director must be voted on by the shareholders. Mr Mayne said that the Santos manoeuvre was “a clever sleight of hand. Santos had flagged its decision to hire Mr Flint. The official announcement came just three days after the share issue. Are we going to see more terrible precedents like this?”

Mr Humphrey was not prepared to be drawn into a protracted debate on the issue at the AGM. “If you have further concerns on Santos, you need to take those up with ASIC.”

Mr Mayne is a Walkely Award winning journalist and prominent public figure. The question had to be raised as to whether there is an easier way for him to eek out a living than carrying the torch for the small investor.

“I couldn’t go back to journalism. I enjoy this too much,” he said.

With that he put his hands in his pockets and marched out into rain-soaked Collins Street. My guess is that he is coming to an AGM near you.

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CRIKEY: Just a couple of comments. Comparing Crikey’s subscriptions to the ASX gouging is a joke. We are a loss-making media outlet and they are a government-backed monopoly charging for basic information and producing a 9000 per cent capital own for its original owners. Gervase Green’s comments about the ASX having conflicts when owned by stockbrokers also fails to point out that at the time it was a not-for-profit mutual. It is the profit-motive which creates the biggest conflict of all.

Peter Fray

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