Crikey has been following the fall out from the DCL AGM this week with great interest. If you want to know more about the Kennett catastrophe read on:
Mark Day on the DCL AGM
Mark Day provides his take on the DCL AGM in this morning’s Media lift out in The Australian
And it seems it will be a while before he mends the fences with DCL managing director Jeff Chatfield:
“And now, the urgent need for a credible new drive-time presenter. In an industry where even the most sure-footed appointments take time to bed in, Chatfield’s management is taking the company to the brink.
“There is no question that, as Kennett pointedly said on several occasions, Chatfield had the proxy muscle and the right to vote his shares as he saw fit. Fair enough, too, if it were a privately held company. But this is a public company, where shares floated at 40c two years ago have hovered around 10c to 15c for most of this year.
“Many small investors have been burned; they are angry, and they want answers. But Chatfield simply stonewalls. It’s a joke.”
What Day failed to report was claims by Chatfield at the meeting that 3MP was losing money when it was run by Day and his mate Andrew Fairley and is actually making money now, despite a slight drop in the ratings.
Day retorted at the meeting that he would have achieved the same if he had the benefit of running two stations under the one roof.
November 27 morning sealed section
Kennett’s Financial Catastrophe
Is 3AK to Jeff Kennett what Liberty One was to Nick Whitlam? Big political names really should learn not to invest more than $1 million in a single venture.
This story in Wednesday’s Age would suggest so as the poor bloke claims he’s facing financial catastrophe after investing more than $1 million in Data and Commerce Ltd shares which bounced 2.5c to 9.5c yesterday but are still facing a very uncertain future: The Age
November 27 afternoon sealed section
The Man Who Rooned Jeff
Ever heard of Andrew Fairley? He’s the man who some believe rooned Jeff Kennett.
The likely lad’s background is that his grandfather founded the Shepparton Preserving Company (SPC) which is still based at Andrew Fairley Drive in Shep.
In the 1980s he would have come across Jeff when he wanted to be a Liberal candidate but things never quite worked out. The lads are both Scotch College old boys from around the same era. Remember that amazing 3-hour infomercial 3MP did for the Liberal Party during the vital 1999 Frankston East supplementary election. That would have been a Fairley deal.
Fairley is a lawyer who rose to become chairman of law firm Hunt and Hunt and even created a specialist law firm to service superannuation funds which he then flogged to Gary Weaven’s Industry Fund Services. It is now called IFS Fairley.
Mark Day and Fairley were the owners of 3MP which was making losses when they approached Data and Commerce Ltd with a proposal to take it over.
In May 2001 they agreed to pay $4.5 million in cash and issue 8 million shares with a deemed value of 25c although DCL only valued them at 12.5c in their books.
Mark Day came down from Sydney this week to attend the DCL AGM on Monday to specifically quiz the board about this valuation and was gloating that he was very happy to get out of the stock at 25c, a far cry from the present price of 9c.
There was a guy at the DCL meeting called Peter Quattro who received 250,000 DCL options at 40c a pop as payment for making the introduction to Jeff Kennett.
When Mark Day really started putting the boots in, Peter Quattro got very upset and started yelling at Day about all the damage he had caused DCL.
Jeff was gifted 5 million shares just to sign on but then showed his faith in the company by leveraging up and buying a few million more on market.
Who did he buy them from? It looks like the answer might be Andrew Fairley and the price was a very juicy 25c a share.
The key Jeff quote in today’s Age was the following: “I invested all of my savings and more from the last 20 years in public service in this operation (3AK) and it’s the biggest investment I’ve ever made in my life.”
Crikey was chatting to Mark Day on the Swan St footpath before the DCL AGM on Monday when Jeff stepped outside to shake hands and have a chat. There was no obvious animosity between Day and Kennett but this is a relationship which obviously needs to be explored. Being a good Liberal, will Andrew Fairley pay the money back.
Or is Mark Day pushing this line hard about DCL being the worst managed radio company in the country as part of an argument to say that Kennett contributed to the problems rather than the alternative argument that he was sold a pup.
Kennett also claimed he was “rooned” in 1999 after he lost the defamation case against The Australian but the Murdochs let him out of jail by not chasing him for the costs.
Here are some recent links if you’d like to find out more on the man who some believe caused Jeff Kennett a huge amount of financial grief:
The Australian tells of Andrew Fairley’s success and generosity.
The Age revealed that Fairley sold his farm after selling his DCL shares.
Media Release on 3AK 3MP merger:
Turtle Island owned by Fairley is a leader in sustainable business practices and a Best Enterprise for Sustainable Travel (BEST) destination.
November 25 afternoon sealed section
Jeff Kennett Quits 3AK
Jeff Kennett has quit the board of Data and Commerce Ltd and will no longer be heard on 3AK after a dramatic board room coup at the AGM this morning.
20-stone Perth engineer Jeff Chatfield continued his shambolic leadership of DCL by combining with the former proprietor of the appropriately named second hand retail outlet Going Going Gone, Mr Ron Hall, to sack the two independent directors, chairman Kevin Campbell AM and Prof Yianni Attikouzel AM.
Jeff Kennett then got up and quit out of sympathy so who knows who will be on air when his shift starts on 3AK at 3pm this afternoon. Tune in to the webcast for a shambles: http://www.3ak.com.au/
DCL have so far sent the following announcement to the ASX about Kennett’s departure and the former Premier should forward to the ASX the feisty statement he read out at the meeting as well:
The proxies came in at 16 million in favour of the independents and 45 million against so they were gone, even though Kennett voted his 5 million shares in favour of their re-election.
Chatfield controls about 25 million shares and Ron Hall a further 10 million.
3AK has just finished its biggest marketing campaign to advertisers using Jeff Kennett’s photo and endorsement (without his approval) but are tipped to lose up to 50 per cent of the estimated $800,000 in advertising commitments the marketing drive brought in.
The meeting was full of disaffected former 3AK staff and presenters who have been sacked by the erratic Chatfield, who gave Jeff Kennett a couple of backhanders for the fact that there were 26 board meetings last year, more than $1 million in corporate overheads and lower ratings than when he joined.
Mark Day, who along with Andrew Fairley sold 3MP to DCL for $6.5 million last year, got up and had several swings at Chatfield as the meeting ended in a shouting match between the friends and supporters of Chatfield and the anti-forces led by Day, Crikey, sacked television commentator Peter Laurance, sacked breakfast producer Mike Frazer, one of Jeff Kennett’s few listeners and the sacked sales manager at 3AK Clyde Simpson.
After shareholders gave the entire board a good bollocking it only then became apparent that the board coup was on when the professor’s proxies were read out.
I latched onto this straight away and asked what was going on but was told to wait for statements a bit later.
Then we had the chairman’s proxies read out and they proposed that the executioner, Jeff Chatfield, would chair this part of the meeting.
I successfully beat this proposal and got Jeff Kennett up to chair the debate on the axing of the chairman and it was then that Kennett admitted that he supported the chairman but Chatfield did not.
Jeff was smiling much of the way through and predicted jovially that “this could be better than anything you’ll hear on radio.”
And so it was. Once the poll was taken, the board reassembled after a 30 minute break and the defeated chairman Kevin Campbell read out his statement explaining how he’d been shafted with just 72 hours notice and in breach of an undertaking given in October.
Jeff Kennett then got up and read out a much more dramatic statement blasting the Chatfield forces and severing all connections with the company because of the lack of directors and officers insurance and independent directors.
Kennett expressed his “abject disappointment” with how the independents were shafted and then blasted Chatfield for double dealing, failing to provide the resources promised for his own program and also using his name and endorsement for a recent advertising campaign without permission.
The Age and the Herald Sun were both at the meeting but this will get a big run nationally as it was the most shambolic and dramatic AGM I’ve ever seen and the result is that Jeff Kennett’s radio career is over.
Chatfield and his head-kicking CFO Craig Lovelady, another colourful lad from Perth, will struggle to pull the on-air talent in these circumstances and advertisers will probably back out such that the shares are a good chance to go to zero.
John Singleton is the obvious buyer but is refusing to deal with the erratic Chatfield and is waiting to pick up the stations from the receiver.
Whilst management claim they are close to breaking even with $6 million in annual sales, the stations cost $7 million to run and a stack of advertising cancellations and a poor final ratings survey for the year in 10 days time could spell the end for Data and Commerce Ltd, a company that today shafted three of its 5 directors, including the legendary former Victorian Premier Jeff Kennett.
Still, at least this will clear Jeff up for another tilt at politics if he so desires. Or what about Jeff to replace Stan Zemanek on the Drive shift at 3AW?
DCL shares were down 2c to 10c this morning so it is already starting to look ugly.
Jeff was worth more than $5 million when they peaked at 44c earlier this year because he has 13 million options over shares at 13c a pop which will now be cancelled just one year into his four year contract.