Englishman Peter Kirby is one of the legends of Australian business,
having created enormous value at CSR during his five-year stint as CEO
which culminated in the demerger with Rinker in 2003 to create one of
the world’s ten biggest building materials groups, based in Florida.

Rinker is now worth as much as The Millionaire
Factory and with a record like that, Kirby was a good recruit to the
board of Macquarie Bank two years ago.

However, as a key independent member of the remuneration committee,
Crikey asked him yesterday why Macquarie didn’t give its shareholders a
non-binding vote on its remuneration report, just as CSR and Rinker had
done a couple of weeks earlier.

Demonstrating who runs the Macquarie board, executive chairman David
Clarke answered that aspect of the question, saying it would have added
to an already busy agenda and that Macquarie had disclosed all of the
material required under the new laws.

The other point I raised when it came to re-electing Kirby to the
Macquarie board was that old gem of who gets allocations in
floats. Kirby was the happy recipient of 130,000 shares in the
ConnectEast float last year which Macquarie packaged and sponsored
after winning the rights to build the Mitcham-to-Frankston tollroad in

Clarke defended the policy of Macquarie executives getting shares in
floats provided that the client approves. Who was the client with
ConnectEast? Macquarie Bank. Clarke then went on to say he assumed
Kirby’s allocation was just part of the dealings he has with
Macquarie’s private banking operations.

The man himself became quite agitated about my “allegation” and
explained that he got the allocation by applying for shares just like
any other Victorian did. He then mentioned receiving some from another
institution that wasn’t Macquarie, even though the float was led by
Macquarie. This presumably was from either ABN Amro or ComSec, who were the other joint managers of the float.

Whatever the case, Kirby will be delighted with his investment as the
50c shares closed at 80c yesterday, meaning he’s made a 60% profit in
less than a year.

The question of how large allocations of shares are handled in floats
and placements remains a major sleeper in corporate Australia. In my
view, no Macquarie Bank director should have applied for shares in
ConnectEast given that they put the whole deal together and these things
should be strictly reserved for third party clients.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey