Salvation Army yesterday unveiled a plan to sell 14 of its aged care
facilities to the Macquarie Bank-backed Retirement Care Australia. It
was quite a change of direction for one of Australia’s biggest
charities, and you can see how the Salvos spun the move in their
announcement here.

is always on the lookout for a good conflict of interest yarn, so we
have a duty to tell you that the legendary founder and chairman of the
Millionaire Factory, debonaire David Clarke, sits on the Salvos
advisory board — as you can see from this extract from his Macquarie

“He is also Chairman of McGuigan Simeon Wines
Limited, the Wine Committee of the Royal Agricultural Society of New
South Wales, Sydney Advisory Board of the Salvation Army, Opera
Australia Capital Fund and Sydney University Football Club Foundation.”

We fired off an email to a member of the Macquarie spin
team at 3.32pm yesterday afternoon and received the following response
at 9.12pm:

There is no conflict. The sale of aged care
facilities to the Retirement Care Australia consortium, of which
Macquarie is a
participant, was struck with the Salvation Army Southern
Region, which is a separate entity to the one David Clarke is

with. David is involved with the Eastern Region.

OK, that’s fine then. After all, the art of
investment banking is to spread your tentacles as far and wide as
possible and there’s no better connected commercial beast in Australia
than Macquarie Bank.

Another example of a potential conflict
involving Clarke was when the Australian Rugby Union decided it wanted
to hedge its share of the $695 million ten-year broadcast rights deal
struck with News Corp from 1995 until 2004. Clarke was the ARU chairman
in December 1999 when the ARU decided it should “ask Macquarie” to
hedge some of the incoming Greenbacks at US65c. Unfortunately, the
currency plunged from US66c in January 2000 to below US50c around the
time of the Sydney Olympics and the hedging arrangement ended up
costing the ARU millions.

As The Australian’s Andrew
White explained in a story back in 2000: “While the base amount has
been locked in at an exchange rate of US65c, the additional proceeds
were subjected to what Mr Clarke called a “sharp reset” with Macquarie Bank
last December. This gives Macquarie the proceeds from the first few
cents fall in the exchange rate below US65c, and lets the ARU keep any
further gains.”

No doubt the Millionaire Factory picked up a
juicy fee for this mistake, but it would be interesting to know the
internal machinations that saw it pick up the work. Compared with the
hedging blunders of the likes of Pasminco and Woodside Petroleum, we’re
only talking small beer here.