When Kerry Packer passed away on Boxing Day, former St Vincent’s
Hospital chairman Peter Joseph was all over the media telling the world
what a generous benefactor he had been.

This, of course, is the same Peter Joseph who is chairman of GPT Group and was a director of ANI back
in 1991 when Packer lobbed one of the most infamous hospital passes in Australian
corporate history – the notorious $2 million sale of his bleeding European
environmental waste management business ABT.

This related party transaction was
neither disclosed nor voted on by shareholders, but two weeks later
Packer sold his remaining 30% stake in ANI, crystallising a profit of $200 million.

In 1994, Ross Palmer sold his company, Palmer Tube Mills,
to ANI but made the mistake of accepting ANI shares for 90% of
the proceeds at the nominal price of $1.90 a share. When ANI’s
European Holter-ABT division suddenly caused a $400 million write-down
in 1996, the shares plunged and the Palmers found themselves seriously
out
of pocket.

Come 1996, Ross Palmer and another director, Fred Smith, were the only two independent ANI
directors who didn’t approve the ABT deal, so they steamed ahead with
their own two-man board investigation and got some legal advice from
Mallesons suggesting ANI should sue Packer for $400 million.

At this point, Peter Joseph proposed a special resolution and succeeded
in having Palmer dumped from the board for being “disharmonious and disruptive” at the 1996 AGM.
The resolution succeeded partly because Joseph’s colleagues at BT
lifted their stake from 3% to 15% and voted against Palmer. Sadly this
wasn’t too flash an investment and ended up costing BT about $40
million, which wasn’t quite as bad as the $150 million they dropped
backing the Packer’s in One.Tel, but that’s another story.

Anyway, I treated 260 shareholders in GPT to a little history lesson
about this saga yesterday when it came to the proposal to give Peter
Joseph another three years as chairman.

Given GPT’s sweetheart deal with Frank Lowy’s Westfield Group last year
and the recent deal over Highpoint with Melbourne billionaire Marc
Besen, I asked whether Joseph had a habit of going weak at the knees when
confronted by a billionaire.

Sadly, acting GPT chairman Ken Moss ruled the statement out of order and
said there was no need for Joseph to respond. As a long-time chairman
of the St James Ethics Centre, Joseph has no doubt spent many hours
contemplating what happened at ANI 15 years ago.

Peter Fray

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