Australia’s leading cash for comment company Southern Cross Broadcasting is trying to pretend the sins committed by Alan Jones and John Laws don’t exist as Crikey tilts at their board.
You will remember that SCB bought 2UE and those cash for comment rorters Alan Jones and John Laws earlier this year in a $90 million deal. Crikey has previously stood for the boards of NRMA and Commonwealth Bank on anti-cash for comment platforms and also raised concerns about this appalling practice at AGMs of Colonial, Optus and Qantas.
It was most amusing to receive this fax from SCB company secretary Eddie Chia in late September:
“Dear Mr Mayne
I refer to your nomination for the board of Southern Cross Broadcasting (Australia) Ltd and confirm that your nomination is effective.
On 10 September 2001, I wrote to you requesting details in support of your allegations that John Laws and Alan Jones have so-called “cash for comment” arrangements. Would you kindly provide such details.
Ummm, well this is the link to the findings of the Australian Broadcasting Authority report into cash for comment: http://www.aba.gov.au/what/investigate/commercial_radio/report/html/2ue_codes.html
Eddie will find a reference to 60 breaches of the Commercial Radio Code of Practice for Jones and Laws combined if he cares to look.
And Eddie should not delude himself that cash for comment has been stamped out. Far from it. As a current example I draw Eddie’s attention to the way Jones and Laws have consistently failed to put any pressure on Qantas for its predatory pricing, abuse of power and general pig-headedness in dealing with the Ansett administrator.
The 2UE website states that Jones has just been scaled back to a new 3 year contract with Qantas that says “no services are required to be provided under the contract”.
Presumably this is just a few free first class flights but you should remember that Jones has collected more than $1 million from Qantas over the years. Also, the cash for comment inquiry revealed that one of Jones’s contracts with colorful Sydney developer Lang Walker specified that “no services are required”.
The John Laws situation is a little unclear because the 2UE website says the six-figure contract with Qantas expired on August 31 last year but it remains on the site.
The deal requires Laws “to record radio commercials; voice overs, staff videos and appear at functions. To provide the personal endorsement of John Laws.”
How the hell does SCB think the two most powerful radio shock jocks in the country can properly cover the Ansett debacle when they are both on the Qantas payroll?
Skeletons in the Southern Cross closet
The Southern Cross Broadcasting AGM starts at 11am on November 1 and they have changed the venue from the traditional location at 3AW in Bank St to 60 Park St, South Melbourne.
After all this takeover activity during the year, the board have really got their hands out for more moolah from the shareholders. There is a resolution to increase directors’ retirement payouts such that anyone serving more than 8 years gets a 5 year payout.
The only directors currently in this category are company founder John Dahlsen, chairman Geoffrey Crawford-Fish and Charles Clark.
The scheme was already pretty generous because long-standing chairman and former National Party Minister Peter Nixon walked away with a golden hand-shake of $387,480 in 1999-2000, bringing his total pay to $474,527 when you included his normal chairman’s fees of $85,000.
But not only is the retirment package getting more generous, the board is proposing pay rises with total non-executive director fees set to rise by 50 per cent from $400,000 to $600,000.
So if we assume that chairman Crawford-Fish is going to enjoy a pay rise to $120,000 a year, his golden hand-shake on retiring would be a massive $600,000. This has got to be one of the generous schemes in corporate Australia.
The man delivering most of these profits is CEO Tony “Slasher” Bell, who is lining up for another 200,000 options over shares worth about $4 million.
The board election could be interesting because the Ten Network has sold its 14.9 per cent stake after the merger with Telecasters Australia.
This leaves the share register completely open and you have a board pushing for more cash on a number of levels.
One of the directors who stands to benefit is Marina Darling who struggles for credibility given the GIO skeleton rattling in her closet.
You see Marina, a former senior associate at Corrs Chambers Westgarth, was one of those directors who recommended GIO shareholders reject the $5.35 a share takeover offer from AMP back in 1999-2000.
The share price subsequently plunged, GIO’s reinsurance division copped a $1 billion write-down and disgruntled GIO shareholders who followed the board’s advice launched a class action against the directors, including Marina Darling.
I’m planning to write to the major shareholders pointing out Marina’s baggage and suggesting that they vote against her re-election and in favour of Crikey instead.
If Australia is to ever develop a culture of shareholder pressure and boardroom accountability then people who reside over $1 billion write-downs will not be just waved through for another 3 year term on their other boards.
And if institutional investors have any sense of ethics, they will attempt to clean up the grubby practices of people like Alan Jones and John Laws by punishing their employers who tolerate them in the name of making a fast buck.
Southern Cross’s disclosure practices also seem to have slipped as this year they fail to mention the related party transactions between Corrs Chambers Westgarth and the company. John Dahlsen remains a consultant to the Corrs corporate division and in past years Southern Cross have always disclosed the amount of annual legal fees earnt by Corrs which is this year thought to be more than $500,000.
Finally, we’re in the market for a proxy or two for this meeting and if you also have any general feedback try [email protected]