Executive Summary: July 09, 2010
By SCOTT ROCHFORT | smh.com.au | 09 July
CBD
From the book of social responsibility
The sugar daddy (aka chief executive) of CSR's Sucrogen division, Ian Glasson, has already made the seamless transition to spruiking the official line of the Singapore buyer of the sugar business.
Asked about Wilmar International's alleged links to heavy rainforest deforestation through its palm oil business, Glasson showcased the green credentials of his prospective employer.
''The issue of palm oil is certainly one very much of social conscience at the moment, as a genuine concern around the environmental concern on rainforests at the moment and on the orang-utan populations,'' explained Glasson at yesterday's annual CSR shareholder meeting.
''Wilmar have a very good track record on this issue. Wilmar have reputable certification,'' he said.
''Wilmar have their own conservation areas and conservation programs for orang-utans,'' said Glasson, in a hint he may have read the latest copy of Wilmar's aptly named journal on corporate social responsibility, the CSR Tribune.
''So they are a very reputable company, and certainly as a potential employee of Wilmar going forward, and certainly for CSR shareholders, I can absolutely endorse them.''
REMEMBER FIRB
While Glasson was celebrating the way the Wilmar people care for the environment, CSR's chairman, Ian Blackburne, was more cautious.
Blackburne was grilled by one shareholder about why the asbestos-liability-laden CSR was not returning all of the $1.75 billion derived from the sale of its sugar business to shareholders.
''I think the shareholders can waste the money just as easily as what you can do. So this time around, Mr Chairman, I'd like you to give the shareholders the opportunity to choose how to waste the money,'' complained the shareholder.
Blackburne responded: ''Don't start spending your money until we've got the FIRB approval, please.''
TOP DRAFT
Citigroup has bounced back from its loss of the former Sydney Swans player Leo Barry to Merrill Lynch last year with the hiring of the highly regarded Goldman Sachs banker Tony Osmond as its new head of investment banking in Australia.
Osmond delayed handing in his resignation until Orica had passed a vote at its shareholder meeting yesterday morning on its proposed demerger of its Dulux business. It was a deal he had worked on. And CSR finally announced the sale of its Sucrogen business this week.
The 39-year-old is credited with helping build Goldman Sachs JBWere into one of the key players in the Australian investment banking scene during his seven years there. It seems Osmond, who is based in Melbourne, is keen on doing the same at his new firm which was badly mauled during the recent financial crisis.
Citi's other recent hirings include the former UBSer and ex-Palladio Partner Brett Paton and the former UBSer and ASICer Karen Phin.
CUDECO VISITORS
Cudeco, the copper explorer chaired by Wayne McCrae, has come up with a limp announcement to offset its share plunge on Wednesday.
A day after announcing another delay to its highly anticipated Joint Ore Reserves Committee (JORC) compliant resource statement, Cudeco confirmed to the market yesterday that its site had been visited by Sinosteel Equipment and Engineering Ltd.
''Sinosteel's team is visiting Rocklands for the evaluation of the site and in relation to metallurgical and engineering studies,'' Cudeco said.
The company said the visit was part of a ''non-binding'' memorandum of understanding it signed with the Chinese group in April, which apparently includes ''financing and terms arrangement options'' for the eventual construction of a mine on its site.
Sinosteel MECC describes its main activities as ''metallurgical equipment and spare parts supply''.
The statement comes a fortnight after Cudeco said Sinosteel would visit its site by the end of June ''to inspect the 'lay of the land' with respect to Rocklands infrastructure requirements, and to conduct discussions with various government and regulatory officials''.
Still, Cudeco shareholders seemed to like yesterday's announcement. The group's shares rebounded 9.6 per cent.
ASX PRINCIPLES
On the back of the Cudeco announcement came the shock Australian Securities Exchange statement: ''Corporate governance reporting remains high.''
After flicking through 1648 annual reports the ASX found that 93 per cent of listed entities abided by 27 principles and recommendations set by the ASX Corporate Governance Council.
The statement said 93 per cent of companies had a majority of independent directors. The ASX also found that 16 per cent had women on their boards, and 2 per cent had a female chairman.
BUSY DIRECTORS
Orica's chairman, Peter Duncan, has helped update the list of excuses directors can use when they are scrutinised for being overly stretched in their responsibilities.
Concerns were raised at yesterday's shareholder meeting that the Orica director Garry Hounsell might have taken on a bit too much by becoming a director of the group's soon-to-be-demerged paint subsidiary, DuluxGroup.
Housell also sits on the boards of Qantas, Nufarm, Mitchell Communication Group and PanAust.
''Apart from this, he has considerable responsibility with unlisted entities,'' the Australian Shareholders' Association's Geoff Bowd told the meeting.
But Duncan fired back with a few neat arguments that could come in handy for other chairmen during the season of annual meetings.
''Garry Hounsell is one of the better prepared directors that I have had to deal with,'' argued the Orica chairman about his ''assiduous'' colleague.
''The very fact of his membership of a number of boards gives him a broad experience of knowledge of what is going on in the markets, which we find to be extraordinarily useful in our deliberations.''
Duncan suggested it should be the shareholders' association and not Hounsell that should be making some changes.
''Your guidelines should take account of the kinds of companies as well as the number of companies of which a director is director,'' he said.
Aside from owning the Toolangi Vineyards outside Melbourne with his wife, Julie, the former Ernst & Young partner (and father of three) is also a director of Therese Rein's job placement agency, Ingeus, chairman of the Investec Global Aircraft Fund, a board member of the law firm Freehills, and a fellow of the Australian Institute of Company Directors.
DECENT PROFITS
Meanwhile, the chairman of DuluxGroup, Peter Kirby, challenged the conventional wisdom that strong competition translates into lower profit margins.
''Competition is actually good for a market,'' Kirby said, in response to a shareholder question on whether the proposed takeover of Dulux's struggling rival Wattyl by the US paint group Valspar could hurt his company's bottom line.
''The better your competitors are, the more likely they wish to make decent profits in a market than in fact competitors that are falling,'' explained the former CSR managing director and Macquarie director. ''Falling competitors usually don't have much of a focus on profit.''
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First published by Smh.com.au on July 09 2010
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