Village Roadshow has long been regarded as a shocker when it comes to corporate governance, something which was reaffirmed despite last week’s court victory over a former finance director.

Peter Ziegler sued Village for $85 million claiming a profit-share in some creative and highly tax-effective film financing structures. Ziegler lost and could now well be bankrupted by the costs of the 72-day battle after the judge upheld a Village counter-claim for $12 million.

Ziegler’s current employer, James Packer, might have to crank up the bonus somewhat this year.

The Australian summed up the battle as follows on Saturday:

In a decision handed down this week, Victorian Supreme Court’s Justice David Habersberger said evidence presented during the case demonstrated that Village’s top brass, including managing director Graham Burke and deputy chairman Robert Kirby, were “prepared to ignore the requirements of the corporations legislation when it suited their purposes”. On the witness stand, Mr Burke declared that he made irrational business decisions because he had been “smoking funny stuff” and admitted the company had engaged in film financing deals that were simply “tax rorts”, while Mr Kirby admitted under questioning that there were probably times that he hadn’t told the truth during business negotiations.

Hmmm, what must Treasurer Peter Costello think when he catches up with Burke at the next private movie screening, described as follows by The AFR’s Pam Williams last May:

The Treasurer’s regular movie group includes ANZ boss John McFarlane, Melbourne businessman Ron Walker and Village Roadshow managing director Graham Burke, as well as their wives.

Interestingly, Village has been the biggest single corporate donor to the Liberal Party over the Howard years and we’ll see how generous it was in 2005-06 tomorrow. The Libs even forgot to reveal almost $50,000 in advertising benefits from Austereo in their 2004-05 declaration. But what did Village get for its $4 million in donations? Will the ATO come down on Village like a tonne of bricks after all that startling evidence?

All this would make for some interesting debate at the next AGM of the Melbourne-based company, although many shareholders struggle to make it to Movie World on the Gold Coast for the traditional 9am start at the Roxy Theatre.

There ain’t no more cynical an AGM scheduler than Village Roadshow. That said, the success of Happy Feet, defeating Ziegler and the effect of new media laws on Austereo’s valuation has helped send Village shares to a seven-year high in recent days.