Having missed the original story listing the shareholdings held by Tattersall’s beneficiaries, The Age hit back this morning with a great yarn on the list of priority allocations in the 105 million public share offer for Victoria’s newly listed gambling giant.

Not since the Herald Sun revealed the dodgy way Macquarie Bank and UBS looked after its executives and corporate clients in the 1996 Transurban float have we had such an insight into how floats can be used to reward mates and business associates.

Tattersall’s beneficiaries received 600 million free shares, and as part of the float the company issued 50 million new shares to retail investors at $2.90 each and 55 million new shares to institutions at $3.10 each, raising more than $300 million in total, but giving away more than $57 million in value when the shares closed on the first day at $3.56.

Stephen Bartholomeusz called it “one of the biggest imbalances in supply and demand in market history,” and given the 20c discount for retail investors, this meant the Tattersall’s board and brokers had a lot of largesse to hand around.

The Agelists various Melbourne power brokers such as Jeff Kennett, Michael Kroger, Ron Walker, Don Argus, Steve Vizard, Eddie McGuire, footballer Fraser Gehrig and even the headmaster of Melbourne Grammer Paul Sheahan as lucky recipients of the maximum priority retail allocation of 5,000 shares each. These lists were drawn up by Tatt’s chairman David Jones, a former Melbourne City Councillor who also happens to chair the prestigious Melbourne Cricket Club committee where he dealt favourably with Eddie McGuire and Steve Vizard through their Sportsview venture.

Even at yesterday’s closing price of $3.33, these connected insiders are still enjoying a paper profit of $2,150 on their $14,500 investment. By way of contrast, ordinary punters in Victoria, Tasmania, Canberra and the Northern Territory were slashed back to just 550 shares each while public applicants from other states got nothing.

Tattersall’s runs Victoria’s most insidious business, profiting from thousands of poker machine addicts who are lured to their 24-hour venues which are concentrated in the state’s poorer postcodes. As a secretive private company, it used charity to maintain a respectable facade but as a public company the strategy has been to get influential Victorians profiting from the business as shareholders.

The idea that Jeff Kennett receives any benefit from Tattersall’s is disturbing given that his government allowed its lucrative licensed pokies business to prosper. Then again, Tattersall’s thought it was appropriate to hire Kennett’s close mate and special gaming adviser Alister Drysdale on more than $500,000 a year when then Treasurer Alan Stockdale started making noises about clawing back some of the value from the $2 billion licence which the incompetent Kirner Government gave Tattersall’s for free in 1991.

It’s even more disgraceful that former Kirner Government minister David White, the man who drafted the original gaming legislation, is now on the Tatt’s gravy train and was hanging around at the Tatt’s launch in his role as flag bearer for influence peddlers Hawker Britton in Victoria. His web profile even gloats about him being responsible for the “introduction of the gaming industry in Victoria.”

Tatt’s is the most government-dependent listed company in the top 100 because its Victorian lotteries licence expires in 2007 and the pokies licence, which represents about 90% of the value, expires in 2012. The Bracks Government has clearly banned its staff or ministers from buying shares but the ever-resourceful Tatt’s knows how to play the game – the largest institutional allocations have gone to Victorian government bodies such as the Transport Accident Commission and the Victorian WorkCover Authority.

Best to have the government as a shareholder and a Labor mate like David White working on the gig when $2 billion worth of gaming licences are up for grabs. Check out the full list of shareholders here. It’s very useful because they are ranked according to size, so you can count the hundreds of new millionaires created by the incompetent Kirner Government and tolerated by the Kennett and Bracks’ Governments.

Peter Fray

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