Michael West scores in The Oz today with the story of Babcock & Brown and top executive Rob Topfer copping a
civil suit that alleges insider trading over the strange business of B&B’s
investments in Fixed Wire Holdings and Commander Communications.

West has done a good job of trying to keep
the fee factories honest, shining a light in various nooks and crannies and in
the process picking up a Walkley Award last year and a defamation action from
Macquarie Bank over its Allstate deals. He keeps this morning’s report straight and
subdued, noting early on that B&B says it has an absolute defence and will
vigorously defend the allegations. West nonetheless includes a mention of the
happy investing of Sydney doctor Joe Ross:

In March 2003, Commander acquired all the shares in Fixed Wire for $60
million. Retired Sydney
anaesthetist Joe Ross, who has sided with B&B in a number of corporate
transactions, had built up a stake in Commander from around 4% in
September 2002 to 17.7% a year later.

When Telstra sold its Commander stake to B&B in July 2003, combined
its control over RSLCOM (via its Fixed Wire holding), B&B had more
than 30% of Commander and was able to engineer control and put its own
including Mr Topfer, on the board.

The interesting thing here is that the suit
has been filed by an individual – former Fixed Wire shareholder Jacqueline
Fraser. She claims that when B&B purchased her 22.5% stake in Fixed
Wire, she didn’t know there was a plan to sell Fixed Wire to Commander, but
B&B and the other Fixed Wire shareholders and directors knew of the

If the case has substance, one might well
wonder why a watch puppy isn’t taking some action. It couldn’t all be too hard
for ASIC, could it? The smell of the
Steve Vizard non-action remains around the kennel – insider cases can darned
difficult and messy.