Okay folks, we’ve got a little admission to make here. Ever since the Herald Sun abused its power and instituted a ban on Crikey and your editor during the 1999 Victorian election campaign, we’ve taken it upon ourselves to hound proprietor Rupert Murdoch at the News Corporation AGM each year.
We weren’t sure which would end first – the Herald Sun ban or Rupert’s annual Australian AGM, but now it has seemingly happened simultaneously.
Anyone can be banned from a media outlet, but the law insists any shareholder or proxy can access an AGM and give it to the chairman and that’s exactly what we’ve done for six years in a row. Poor old Rupert has copped his biggest public dressing downs in decades over the past six years at the very AGMs where he used to be feted like a hero.
We thought it would be a 10 year project to get him to leave Australia and were therefore delighted when he finally upped sticks this week, escaping to the saftey of Delaware and therefore avoiding the annul grilling at the hands of Crikey.
Crikey’s old boss Terry McCrann is in furious agreement about our profound influence as he wrote the following in the Murdoch tabloids this morning:
The carelessness of a collection of 12-year-olds
THE Age has welcomed its new editor-in-chief with an ‘admission’ on its front page that it is not a serious newspaper put together by grown-up people.
In the middle of its coverage of News Corporation’s shift to the US, approved overwhelmingly by 90 per cent-plus majorities on Tuesday, came the following sentence.
“It was difficult not to wonder if the News shift to the US was due in some way to the presence in the past six years of corporate governance warrior Stephen Mayne.”
That Rupert Murdoch had embarked on the truly monumental legal and commercial exercise of shifting a $70 billion enterprise, employing tens of thousands of people, with the billions of dollars of turmoil that ensued around its share price, to get away from the once-a-year irritation of an utterly insignificant gadfly.
You might just as well, and as credibly, have put the shift down to Murdoch being bitten by a mosquito on one of his visits to Adelaide. Right. That’s it. We’re off to Delaware.
If that sentence had been written by a 12-year-old, whose total exposure to News Corp, the broader media, investment and business worlds, and to the specific proposal, was limited to 10 minutes and 10 minutes only, of Mayne setting out on Tuesday to prove the meaning of the word futility, and succeeding, you might – just – explain how something so breathtakingly and embarrassingly ignorant could be written.
By not just any 12-year-old, mind you; but by an uninformed 12-year old. But how on earth did it actually get into the paper? And on to the front page?
As with most things, the truth is somewhere in the middle. There’s no doubt that Rupert Murdoch is a paranoid autocrat, obsessed with having absolute power. For decades he took no criticism at the annual meeting in Adelaide and could pretty much do what he pleased running News Corp like a private company.
To understand his sensitivity to criticism, you only have to look at the craven coverage from his various loyal mouthpieces, led by the likes of the Terry “His Master’s Voice” McCrann. Rupert has just betrayed his loyal Australian division and not one public word of dissent has been heard from within the empire.
Can you imagine the outrage if BHP-Billiton, Foster’s or Qantas suddenly upped sticks and left?
Rupert awoke in Melbourne to read The Age yesterday and it wasn’t long before his Special Republican Guard had been swung into action. How dare someone suggest the great leader could be influenced by someone who stands up to him. Quick, demolish him Terry, don’t let that line take hold.
So why did Murdoch keep coming back to Adelaide for all those years after he became a US citizen in 1985 and was suddenly deemed to be a foreign company by Australian law?
Firstly and foremost was his tax motivation because his stake was pre-1985 and therefore exempt from capital gains tax.
Secondly, you had the supine Australian accounting laws which allowed him to report higher profits than what the US GAAP system permitted.
Thirdly, you had weak governance requirements and the lack of a culture of shareholder pressure in Australia, best illustrated by the one question Rupert received in 7 years at the News Corp AGM in the 1990s before Crikey turned proceedings on their head at the 1999 annual meeting and asked 16 straight questions over 40 minutes.
The tax issue remained a powerful reason to stay so what was it that really drove Rupert to do something that hurt him financially? Crikey believes the trigger was the 2003 AGM when Australian institutions voted down his proposed executive options scheme.
This was the first time Rupert had been defied by his own shareholders. It was acutely embarrassing and Crikey immediately stood up at the AGM and rubbed his nose in it, declaring this was the biggest step forward in the history of Australian corporate governance because the world’s most powerful man had been defied for the first time in 50 years.
A couple of shareholders said later that I had gone over the top rubbing his nose in it and it must have driven Rupert crazy, especially when a show of hands at the previous year’s AGM had split close to 50-50 on the question of whether I should have been elected to the board.
We all know that Rupert obsesses about board control and total power, yet these provincial Adelaide shareholders had suggested that a man Rupert hates with a passion be appointed to his board.
Therefore, in 2002 the supposedly loyal shareholders at the meeting defied Rupert and then in 2003 the faceless institutions wouldn’t allow him to fulfill his options promises to key executives.
Here is a very simple question for McCrann to answer – why did Rupert start working on the change of domicile within days of the 2003 AGM? Operationally he should have been based in America for almost 20 years but he has only chosen to go now and Crikey played a small part in that timing by giving some rhetorical dressing to the rising corporate governance demands in Australia.