The call came through from Babcock & Brown this morning politely
inquiring whether there were any questions coming at tomorrow’s AGM in
Sydney that could be telegraphed in advance to allow answers to be
prepared. Nice try!

AGMs should be full of lively unscripted debate. Sadly, institutions do all their talking in private with company executives
and the Australian Shareholders Association often gets neutralised
through an exchange of letters before an AGM.

Journalists don’t send through copies of questions before press
conferences and barristers don’t telegraph their punches ahead of a
cross-examination so why should shareholders make it easy for a board
on their one public outing of the year?

The other point is that you often don’t work out what questions to ask
until the meeting is under way and the presentations and debates flow. If anyone’s got suggested questions for
Babcock tomorrow, drop a line to [email protected]

It should be a lively debate, so those at a loose end in Sydney are
welcome to get down to the Four Seasons in George Street from 10.30am.
Visitors
can observe but not speak, there’s usually a good spread afterwards and
it won’t last for more than two hours.

Babcock is facing the same problem as Macquarie Bank with
underperformance in some of its satellite funds, partly due to the
excessive fees that are being ripped out and partly thanks to the
excessive prices being paid for some assets.

I bought 340 Babcock & Brown Infrastructure (BBI) shares at $1.49 a pop
this morning – a right bargain considering it hit a 13-month low this
week, triggering Babcock CEO Phil Green and infrastructure boss Peter
Hofbauer to each shell out $4.82 million over the past few days soaking
up stock at $1.51. The announcement came out yesterday and instantly
sent BBI up 4c to $1.50 this morning as investors follow the money.

BBI is a classic case of the flawed and conflicted Babcock and
Macquarie model. After cleaning up the Beattie government with its
original $630 million purchase of the Dalrymple Bay coal terminal in
2001, the asset was profitably flipped into a listed vehicle in 2002.
Since then, BBI has been on a spending spree which has included $1.8
billion on New Zealand energy company Powerco, $1.5 billion on TD Ports
in the UK and $280 million for an underground power cable business in
New York State.

Fees have been ripped out every which way and now the stock is starting
to slide, such that investors who stumped up $673 million at $1.58 a
pop in a March capital raising, found themselves 8% underwater before
the Rich Listers started propping up the stock in recent days.

All of this should make for some lively debate tomorrow as, just like
Macquarie Bank, Babcock is an extremely issues-rich operation. The
challenge is just comprehending the scale of what goes on, so send
those suggested questions through.