When the fuss over the flag died down after Australia Day, a club of four private equity investors was relieved. But more recent news got this high-profile group scrambling again. When last week, astronomers turned NASA’s space telescope on Southern Cross star Beta, revealing a sister, they unwittingly unmasked a secret source of the privateer’s profits.

Crikey can reveal that sewing a new, seventh star on the ensign was already a key facet of the plan to take the flag private, but the flag’s new wave of public glory has the consortium reeling. “This is a unique asset. We could extract far more value from it by keeping it under wraps, where it belongs,” a buyout spokesman said.

The group, Ozflag Partners, draws together an unlikely quartet of Pauline Hanson, Sheik Taj El-Din al-Hilaly, the Australian Republican Movement and News Corporation.

The spokesman said, “Despite the flag’s iconic status, it’s been left to flutter, ignored, for years. Attempts by politicians and radio hosts, and now meddlesome astronomers, to raise its profile only detract from its long-term value.”

Federal minister Malcolm Turnbull has declined Crikey’s requests to comment on speculation he is funding the Australian Republican Movement into the deal. London sources say Turnbull has brokered a brilliant pact, ridding the need for another republic referendum. With Turnbull’s money, ARM outbid fellow consortium member Hanson for the placement rights to the flag’s upper hoist-side quadrant, the corner from where the Union Jack has looked down on us for over a century. And, in a masterful follow-on deal concluded in a video link with HRH Prince Charles personally, Turnbull spun off the Union Jack to Buckingham Palace for an undisclosed but significant sum. “It’s coming home with the Ashes urn,” said a Palace source. “No price is too high, not after the last Test.”

Under the Foreign Takeovers Act, republican Federal Treasurer Peter Costello has power to block foreign bids. “Turnbull’s concocted another triumph,” said the Treasurer, gritting his teeth. “It only looks like the Poms are getting part of our flag. But really, they’re just paying up for what’s theirs already. And since it’s below the 25% limit, and the consortium are all Aussies, no, I can’t stop this.”

With Costello’s hands legally tied, ARM is auctioning the spare quadrant to the highest bidder. Excited by the new seventh star, fellow private equity investee, Channel Seven is tipped as hot contender for the prime logo spot.

Consortium insiders Pauline Hanson and Sheik Hilaly are also negotiating for the rights to the six, possibly seven, stars. Hanson is unwavering in her mission to keep them white and she is seeking an option to include even more. “The whiter the better,” she said.

But News Corporation is expected to trump them all. “With exclusivity over the Southern Cross and other stars, perhaps the Sun,” glowed News chief Rupert Murdoch, “and rights to dim and brighten them at will, think of the potential.”

The Prime Minister is furious with Turnbull and Costello. He fears the Union Jack’s removal may render the Liberal Party’s logo identical to the ALP’s. “People might think there’s no difference between us,” Howard complained. “Malcolm has broken the nation’s heart over this,” he added.

But Howard is pinning his hopes on one of Hanson, Hilaly or News Corporation coming to his government’s rescue. “They’ve each done it for him before,” a source said.

Yet the PM’s plans may come unstuck with the Labor Party plotting to gazump him by offering to parachute Sheik Hilaly into Peter Garrett’s seat of Kingsford Smith. “We’re practiced at this,” said Labor’s Kevin Rudd. “Besides, Hilaly has good credentials. He can say virtually anything and get away with it and, unlike Garrett, he’s got real ministerial experience.”

But in a shock move, competition watchdog and ACCC Chairman, Graeme Samuel announced he is examining the flag bid for its anticompetitive elements. “I don’t care who these people are and frankly, we’re poles apart. They’re not going to carve up our flag between themselves in some cosy private deal. If they want our flag, they can bid for it against each other in an open and fair process,” he said. “The flag isn’t some piece of raw meat to be ripped apart by cats in some dark alley.”

John M. Green is a writer and company director and former executive director at Macquarie Bank. Currently, he is writing a business book on how to identify corporate failure before it’s too late. He owns several Australian flags.

Peter Fray

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