Heroic Australian Treasurer, Peter Costello’s recent ‘guarantee’ of the wholesomeness of Australia’s ‘vertically integrated’ government-judicial-regulatory-media corporate and legal culture might be a bit premature if not downright dangerous. To quote Ayn Rand’s novel “Atlas Shrugged” “when you see that money is flowing to those who deal not in goods, but in favours when you see that men get richer by graft and by pull than by workyou may know that your society is doomed.” Buddy Galt, foreign financial correspondent reports.
Coming from the man who has ultimate responsibility for the systemic health and stability of the Aussie financial and corporate system, that’s some there bold statement pardner, ol’ buddy you.
Sheeet, pardner is just what Treasurer Costello has let the Aussie taxpayers in for. Why? Because he has the very important job of Treasurer of the republic, that’s why. And he should know it is a very dangerous past-time for Treasurers and senior elected officials of countries to tout that everything is just hunky out there when all the portents look, well, slam dunky. Think of Helen Clark or Clucktz whatever her name is, and her Air New Zealand investment advice, and what a downer (no pun intended) that turned out to be as Air NZ chanced it with Ansett.
Particularly when foreign investors are straining for the slightest smell (to mix metaphors) on the world stage that the Aussie Prez, correction, PM, is standing on right now. If it all goes pear shaped, the Aussie Treasurer is gonna be the man of the moment when them thar investirrs come a lookin’ for that Government trust and confidence guarantee that sounded like he just handed on out.
Treasurer Costello’s statements of Aussie corporate scene wholesomeness must have been substance-based. Maybe on the substance of his advisors, those pillars of Aussie regulatory and oversight rectitude, those corporate big end lickers none other than APRA and ASIC in whom Aussies repose their trust and confidence.
Let’s just pause and focus on this for a moment and craft some thoughts here to see if there might be a systemic Aussie corporate and investment problem that the Aussie Treasurer has overlooked.
There was BHP-it-couldn’t-happen-here-in-gentlemanly-Melbourne. Remember the odd $10 billion torn up behind the BHP scenes before the whole rotten oozing mess simply sludged out ‘roun the boots of the deaf, blind and dumb index-hugging Aussie instos. Someone should tell outgoing BHP CEO Paul Anderson that’s why he got the gig in the first place.
Also on Bourke Street Melbourne was BHP’s Beswick which had that l’il ol’ outfit holding about a quarter of BHP (but BHP wasn’t really buying any of its own shares, so the Club said, so they weren’t, okay? And if anyone says otherwise, they just don’t understand).
Then there was Elders value adding ‘options’ of yesteryear to keep the Elliot crew of old at the wheel or was it the Harlin pumps in the old Prahn jam factory
Yannon at Coles Myer, an oldie but a goodie nonetheless, if you were Solly Lew that is.
Spooling up now – GIO/AMP, FAI, HIH, and probably most of the Aussie insurance industry, yes, even possibly QBE- we-don’t-need-any more-capital-except-perhaps-for-another-bill-or-so-yet-to-come-that-we’ll-tell-you-about-later.
Pasminco. Ah yes, Pasminco, the all-is-well-we-know-naathing from ‘Emmanuel’ Rayner (and not even a squeak from ASIC there about the roles of the banks in Pasminco’s currency debacle, like who knew what and when and the courts caving in to the Takeover Panel against ASIC (whichever club spare wheel the Takeover Panel is, and which has the added cache of sporting Jodee Rich’s wife). ASIC, where do they stand on this one? Just silence.
NAB’s 4 billion Homeslide/sludge/icide Francis-I just learned-about-thiswhen- I- was-going-for-my 8am-Saturday-run Cicutto, NAB’s CEO for the moment; calling NAB’s auditors KPMGggggggggggeeee and no-one at head office was to blame for any of this, so all is okay, right? Right, but this was just a Positioning For Growth exercise. Gracious. What else haven’t they told the market for an encore?
Claytinny Utz, of tobacco case ‘document retention’ fame they were just ‘disappointed’ or whatever the cliche51 was that was rolled out at the time from the legal dictionary used by PR flacks to describe incipient disasters like ‘meritless’, ‘vigorously defend’, ‘misconceived’, ‘outrageous’, ‘we’re not exposed’ etc which translate respectively to “we’re pinged’, ‘pettifogging is our only hope’, ‘we’re guilty as hell’, ‘right on, Blue’, ‘we have our gonads hanging out’ .
Anderson’s, that former fat five audit and accounting firm, auditors of HIH and other companies previously believed sound
Club cartel banks and the credit card intercourse fees strike that should be credit card interchange fees, ha ha, just a Freudian slip there twixt cup and lip and 69 cheers, hip, hip for the honest-to-God banking cartel, with 30 odd percent of the Aussie investment index and about 300 percent of all corporate ‘profits’ in Australia.
One ‘profoundly misled’ Tel.
Oh yes, and the absolutely fabulous Ansett.
Australia’s great chronicler of corporate spivdom, Trevor Sykes, is the best man to complete the current hall of fame. Your foreign correspondent hasn’t even got to the sycophantic Aussie print and electronic media and corporate analyst gold fish bowl yet. Who in Australia knows of any business media or analyst that allows their interviewee subjects to dictate editorial policy on what will and won’t be probed and published and broadcast as the price of continued access? Anyone hear a pin drop.
So let’s just see who might come a knockin’ on Treasurer Costello’s door for compensation – “Ah’m a lookin’ for yer and a piece of the booty your booty shake that booty, and gimme a piece of it”.
What about US shareholders in Aussie companies, most of whom also have American Depositary Receipt programs trading on the NYSE, for starters?
And while we’re a thinking about that, lets also think about Eliott Ness in NYC, wait one, that’s Eliot Spitzer wrong name, same go-get-em attitude – and that big payout he’s extracted from Merrill Lynch for a touch of alleged analyst wrongdoing, not admitted to by Merrill Lynch, of course, coming to a board of directors and company near you.
Howabout some big-time US bounty hunters and corporate predators seeking truth, justice and the American way downunder? And what if that little cocktail hit the fan.
Treasurer Costello might want to check the Aussie Government’s exposure (that’s code for Aussie taxpayer exposure) with his buddy the Attorney General. It may be that a large part of the wholesome mess that is the Aussie corporate sector in which he seems to repose such confidence is subject to stringent extra-territorial US securities and disclosure laws. Forget the cream puff, thrash-with-a-feather ‘assistance and counselling’ that APRA and ASIC habitually dish out to the big boys.
Treasurer Costello might also want to ask any large corporates like banks and insurance companies if they are doing any big share buyback price support schemes while sitting like quiet little church mice on anything remotely like market sensitive information. In the US, that’s big time wrongdoing baby. Big Dubya calls it fraud. And Big Dubya probably just can’t wait to get some corporate miscreants, even foreign ones, down at Camp Delightful in Cuba for some sun, heat and exercise of the sphincter muscles. That should be fun. And remember, Little Dubya has pledged to help Big Dubya out, National interest and all that stuff.
What with Big ‘Dubya’ and Elliot ‘Ness’ Spitzer on the case, Treasurer Costello just might have John ‘Dubya” Howard on his case if Costello’s corporate confidence recital blows up. Does anyone really know what the good ‘ol club sport boys in Melbourne and Sydney are up to? Forget Perth, something creative has to be goin’ down over there for sure.
It seems it takes ACCC raids on these jokers (now there’s a nice Aussie expression of old for all you young’uns) just to get some straight answers, and even then they squeal like stuck pigs and go running to mommy to save them.
Here’s some lines of investigative country if Treasurer Costello adopts an Irish insurance approach to be sure to be sure.
Keep an eye out for directors and companies that:
Seem accident prone, with big surprise write- offs and a bland and belated sorries to booty
Repeatedly don’t fulfil their growth strategy promises to shareholders (bit unfair maybe, because this covers lots/most of Aussie listed companies)
Are members of a cartel and bask in oligopoly un-earned profits whilst proffering you ‘advice’
Who pay cash for comment/no comment
Who have a following of sycophantic fawning analysts, journalists and media commentators who, surprise surprise, are only just now ‘discovering’ things and what’s more, writing about them, even though they seem to hold their key boards at 40 paces with kid gloves.
Who have had high-profile director resignations/retirements/firings/denials.
Whose CEO and management looks, well, incompetent, but nevertheless very highly paid and with swags of options
Who repeatedly say trust us, there’s nothing in these nasty rumours/allegations/resignations/exposures
Who have share price support schemes operating under the ‘capital management’ banner (that gets a round dozen short list alone).
Who have a large number of US-based shareholders who might come a knockin’.
Who are a big part of the Aussie investment index which the Aussie instos apparently ‘must have’ in their portfolios (this makes the said company boards and managements doubly complacent you see)
Who push for the creation of ‘national champions’ in the name of global competition
Who attack the ACCC and Mr Fels
Well, that’s just for starters.
The fact is, Australia has a systemic and chronic trust and confidence problem every bit as bad as the US. The entire Australian corporate-government-parliamentary-judicial combine is suspect. It works to crush any incipient competitor to the established Aussie order. A cowered and sycophantic general media, business commentary industry sits idly by, silent whilst the superannuation-fed orgy of wrong doing, corner cutting and pettifogging goes out of control. The judiciary can scarcely be said to enforce the rules credibly and without favor although the recent tobacco case shows a glimmer of hope.
Anyone who has shares in any Australian listed company or mutual fund has to be a supreme risk taker. If the bank cartel and Telstra were stripped out of the Aussie share index, then the rest of the index has gone nowhere since 1987, despite being force fed with $600 billion of superannuation money since then.
The Treasurer of a country has an important role to play. His job is not to defend the mess, but to fix it, and fast.
So here’s what Treasurer Costello could do to get off the hook before Little Dubya gets home. Its Big Dubya’s ‘truth-in-accounting-and-disclosure’ statement by individual public company directors.
Just require that within the next 30 days, every director of every Aussie bank, insurance company and financial services company for starters signs a piece of paper that simply says
“Dear Treasurer All the company/ies of which I am a Director (refer Schedule A for serial directors) has/have no undisclosed contingent liabilities, our accounts are truthful, and don’t need any re-casting. My lawyer x will accept service on my behalf if I am wrong and I personally accept any liability for the veracity of this statement signed, (Serial) Director”.
And won’t there be screams! But it’ll wake ’em up in the big city and the Aussie Treasurer will get his tail out of the implied guarantee sling to booty.
And if any directors don’t comply, he can prompt ASIC to move ’em on out and encourage institutional shareholders to demand replacement directors who will comply. And foreign and domestic investors, including all those Aussie superannuation investors/voters will welcome the sea change as a long overdue kick in the booty of the Aussie system.
Might as well ask the auditors to sign personally as well, and ask them all to nominate their insurance company just in case no-one believes them. And as final belt and braces, refer their nominated insurers to the HIH Royal Commission and APRA for an ‘integrity’ check. Now that should be fun.
Over to you Treasurer Costello, buddy, and good luck.