When it comes to the Melbourne business establishment, David Crawford is arguably the chief flag bearer.
Scotch College, Melbourne University, Melbourne Cricket Club treasurer, former KPMG chairman, Foster’s chairman, Lend Lease chairman, longest-serving BHP-Billiton director and official corporate reviewer of the AFL and Cricket Australia.
Crawford was pictured in most of the newspapers today after lining up proxy advisers yet again in a spirited debate in Melbourne yesterday hosted by the Australian Institute of Company Directors. The 67-year-old veteran clearly doesn’t like people who recommend against members of the Directors’ Club or their pay and governance practices.
The Australian’s business commentator John Durie regularly chips Crawford for his failure to give his old firm, KPMG, the boot after a record 52-year run as auditor of Lend Lease. Durie was at it again in today’s paper even after Crawford made the following comment at the recent Lend Lease AGM:
David Crawford: You’re right to refer to Mr Durie yet again referring to that. I’m not sure whether it’s because he’s short of copy, but it keeps on recurring at a regular interval. He knows my view on that, because I have spoken to him several times. He knows the view not only of me but of many other senior people around town, but he seems to hold a view which he is insisting on presenting time and time again. My writing a repudiation of that will obviously not get air time through Mr Durie and it hasn’t got air time through his reports.
Crawford is also said to be the toughest audit committee chair in Australia, raining questions down on external auditors, internal auditors and management alike.
All of which made the following exchange at the Lend Lease AGM a little hard to fathom:
Stephen Mayne: I’ve got a specific question for the auditor. I am assuming that it is KPMG’s Chris Hall who’s signed off on these accounts.
David Crawford: Yes.
Stephen Mayne: I’m a councilor in the City of Manningham and I’m on the board of our aged care provider (Manningham Centre Association); I’m on the audit committee of council and that board, and we’ve taken a decision to write down our bed licences to zero. So we’ve taken a $6 million write down to zero, because ASIC is advising us there’s no market in bed licences; that with these Productivity Commission reforms there’s a suggestion that the whole bed licence system is going to be thrown out and the comment has been made that the federal government can’t give them away at the moment — the bed licences, they can’t give them away.
So we had that advice from ASIC and we have taken the write down. I’d like to hear from the auditor why we are still carrying our aged care bed licences at $168.6 million, up from $159 million last year, and can I just have some sort of undertaking about the future audit as to whether you will actually bite the bullet on bed licences if the system is abolished when we finally do hear the detail of the federal government’s proposed new regulations and systems for the industry?
David Crawford: Stephen, you know as well as I do that the auditor is here to make a comment and respond to questions specifically on his audit.
The issue to which you refer is in relation to the carrying value contained in the accounts. That is a decision — the accounts are the accounts of the company and the directors — it is the directors who sign off on them, and the directors have taken a view on the carrying value of those assets. Obviously we feel comfortable with that because that’s what we have included in our annual report. The auditors have had an opportunity to review that. They have not raised any qualification in respect to the carrying value of those assets, and I can’t take it any further. Are there any other questions?
Well, yes. Why was the KPMG auditor protected from answering that pretty straight forwardquestion? If the Corporations Law specifically provides an opportunity to quiz auditors at the AGM, then chairs such as David Crawford should know better than to shield from scrutiny. Especially when he made his millions working for the same firm and has continually resisted calls to give the audit work to one of KPMG’s rivals.
*Disclosure: Stephen Mayne is a director of the Australian Shareholders’ Association and represented ASA at the recent Lend Lease AGM