When former S8 founder turned MFS shareholder Chris Scott first started agitating for a spot on the board, MFS chairman Andrew Peacock came out swinging, telling The AFR three weeks ago: “For reasons well known to Mr Scott, I have absolutely no respect for him whatsoever.”
Adam Schwab pointed to the possible reason for this position in Crikey on March 3 when he wrote:
Peacock’s feelings towards Scott may have something to do with Scott’s scheduled appearance in the Southport Magistrates Court in August in relation to charges relating to commissions deducted at S8 apartments. If found guilty, Stella could be liable to pay $44 million in fines while Scott could face a two-year jail term.
What is it about these Gold Coast companies!
Peacock clearly saw the writing on the wall when he capitulated yesterday and agreed that Scott and two associates could join the MFS board, provided they abandoned the April 7 EGM when the Kooyong Colt was facing certain defeat.
It would have been completely untenable for this meeting to proceed with MFS shares still suspended. A number of the prominent shareholders are facing margin calls when trading resumes and shareholders still haven’t seen the December half result — something you need before deciding to sack a chairman.
Peacock’s political skills were clearly in evidence in yesterday’s compromise, because being publically executed would have been an absolute disaster. Instead, he can now flick an MFS hospital pass to Scott and resign, although there will be least one more public outing in Melbourne next week at a separate EGM to change the MFS name to Octaviar. Talk about fiddling while Rome burns.
What Peacock did yesterday was the equivalent of promoting three plotting backbenchers to the Cabinet to head off a leadership challenge. The next step will be handover of leadership knowing about the impending train wreck.
MFS is dead for two reasons principal reasons. The financial services business can never recover from the ignominy of a run – just ask Bear Stearns. And the Stella sale to CVC was at an enterprise value almost $1 billion below the $2.3 billion they paid for it.
Peacock has learnt a salutary lesson here: it is much easier being paid $750,000 a year to be a full-time door opener for Boeing than it is chairing a complex, controversial and debt-laden property and financial house that was previously built, owned and operated by the newest breed of Gold Coast white shoe-brigaders.
Check out this Mayne Report list tracking the performance of former Coalition politicians on public company boards.