claims it has net assets of only $757 million, but does anyone else
agree with the view its true market value, not that I’m advocating any
form of float or demutualisation, is closer to $2 billion. Here are a
few key points to consider:

  • The RACV is debt free, has cash in the bank of $277 million and reported a record $99.87 million net profit in 2004-05

  • The 30% stake in the key joint venture with Insurance
    Australia Group (IAG) is valued at only $158.34 million yet it returned
    a fabulous dividend of $95.8 million in 2004-05. The true market value
    would be in the $600-$900 million range. IAG reported shareholder
    equity of $3.85 billion as as June 30 this year when its market
    capitalisation was $9.58 billion

  • A whopping $219 million of franking credits sit on the balance
    sheet which would be valued highly if distributed to shareholders as
    franked dividends one day.

  • After spending almost $200 million on the extravagant new
    headquarters at 501 Bourke St, the independent valuation of all RACV
    land and buildings only came in at $115 million as as June 30, 2005 .
    Either almost $100 million has been blown or conservative valuations

Meanwhile, one subscriber has sent through the following interesting note:

the Crikey report that “the incumbents have… distributed flyers on
windscreens across parts of Melbourne” is accurate, then it appears
that they have broken State law in their campaigning. As the EPA’s website
makes clear, it is an offence punishable by a fine of up to $1048 to
place advertising material on vehicles. I would have expected that such
learned board members, with their lengthy experience with a motoring
organisation, would know about such things!

And John Wood, a supporter of “distinguished” banker John Rawlins, writes:

Mayne‘s comments about the character and integrity of John Rawlins,
current director of RACV, do him no credit. Stephen’s snide remark
about John’s time at Tricontental indicates a total lack of knowledge
of John’s role and his courage and grit to stand against and apart from
the Boards of Tricontinental, the State Bank and the Cabinet of John

John Rawlins was the one person who objected to the
lending policies of Tricontinental and in particular against the lack
of policies and procedures at Trico and the poor documentation of
loans. In the end, John Rawlins resigned from the Board of Trico and
his resignation caused great waves of venom against him from many
sources. The stress and the disappointment that some colleagues did not
support his stand caused his health to suffer. Stephen would do well to
concentrate his efforts against the Cain Government of that time which
unleashed Ian Johns on the financial world.

Rather than
disparage John Rawlins, Crikey should have emboldened his image on
Crikey’s mast head as a tribute to courage under great adversity. While
John Rawlins gained no financial advantage from his stand he does have
his integrity and standing as an honest person fully intact. Crikey has
not yet earned the right to take that away from John Rawlins.

Stephen Mayne responds:

only pointed out that John Rawlins was a director of Tricontinental and
this was not disclosed in his RACV CV after he called me “notorious” in
a letter
to members of a disabled charity he chairs and also attacked my
disclosure practices for not revealing fellow candidate Paula Piccinini
is my wife.

I was very careful not to say John was responsible
for the calamitous $1.7 billion loss suffered by Victorian taxpayers.
Indeed, do a Google search and you’ll find this piece
in the Crikey archive which quotes all the references to Rawlins at
length from Hugo Armstrong’s book about the collapse of Trico.

I am a strong believer of the view that directors who walk should talk.
John should have either stuck around to fight the crazy lending
practices from inside the Trico boardroom or resigned, as he did after
three years in April 1988, and publicly blown the whistle to maximise
the prospects of some remedial action being taken.

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