Strongly suggest you look at page 18 of The AFR today and the
article about Austock’s recent capital raising and pending float. There
are not notes to accounts of major corporations yet indicating key
executives have invested in Austock, although this might reflect the
fact the investment took place on July 1. These companies pay Austock
huge corporate fees and therefore there is an enormous conflict of
interest. Where is the corporate governance? Might be worth a trip to
the ABC Learning AGM in late November to ask Sally Anne Atkinson
(chairwoman) about corporate governance and disclosure. Would not be
surprised if key execs from Timbercorp, Sigma, Arrow Pharmaceutical and
the like have also invested.
Stephen Mayne writes:
Our tipper raises some good points. The AFR has quite openly
reported that the $12.5 million capital raising in July was
specifically with high profile executives who have a business
relationship with Austock.
For instance, ABC Learning CEO Eddie Groves has emerged with a 4.2%
stake in the firm which advised on the big three way merger in 2003 and
fully underwrote the capital raising at the time. This Google search shows the depth of the relationship and now Eddie has become one of the largest shareholders.
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Does Eddie now feel obliged to direct all corporate advisory and
underwriting work to Austock because he’s a major shareholder? Why
wasn’t ABC Learning itself offered the investment?
The same goes for Leighton Holdings CEO Wal King, MCS Property
co-founder Julius Colman and various others who received an allocation.
The big question that needs to be answered is the pricing of the equity
raising. How much cheaper will it be than the forthcoming float price?