Executive Summary: Wednesday, 1 July, 2009
By | smh.com.au | 01 July
Business Focus, Sydney Morning Herald, 1 July, 2009
Rock fall shuts WA mine
For the second time in a month BHP Billiton has had to close part of its Perseverance nickel mine in Western Australia following a rock fall. One miner was trapped underground until about 2am yesterday and all underground operations were closed. Most of the mine has since reopened, apart from an area around the rock fall, the company said.
No dividend for AACo
Australian Agricultural Co. will not pay a final dividend for the 2008 year because it would not be prudent in the current economic environment, the company has announced.
PanAust deal gets OK
The Foreign Investment Review Board has given Guangdong Rising Assets Management Company Ltd the green light to take a 19.9 per cent interest in PanAust, further to a share placement. The proposed transaction remains subject to approvals by Chinese regulators and PanAust shareholders.
Record year for Cardno
Engineering services company Cardno has forecast a record full year net profit of between $31m and $33m for the 12 months to June 30. The managing director, Andrew Buckley, said second half performance was hampered by slower business conditions in some sectors, project delays, and a stronger Australian dollar.
Asciano's long haul
Ports and rail operator Asciano has signed a 10-year deal to haul coal for Anglo Coal in Queensland, starting in the 2009/10 financial year. The contract provides Anglo Coal with rail haulage capacity of up to 5.75m tonnes a year from its Moranbah North mine.
Coates leaves Xstrata
Xstrata Australia non-executive chairman Peter Coates will retire from the miner to concentrate on his growing workload on other boards. An Xstrata spokesman said he would not be replaced. Mr Coates sits on the boards of oil and gas producer Santos, nickel miner Minara Resources and engineering company Downer EDI.
Xchange
Edited by Miriam Steffens, Sydney Morning Herald, Wednesday, 1 July, 2009
INVESTORS ended the financial year on a high, with the ASX200 posting its biggest gain in almost three weeks. But the punters, no doubt relieved that the horror year on sharemarkets was over, were hesitant to break out the champagne some are bracing for yet another dip, pointing to the rally of the past three months.
While the Australian sharemarket posted its biggest annual loss since the 1980s, investors were positioning themselves in the final three months for a budding recovery. With some green shoots emerging in the economy, the benchmark climbed 10.4 per cent in the June quarter, its biggest quarterly gain since December 2004; and consumer discretionary and industrial stocks led the charge. They rocketed again yesterday after David Jones's profit upgrade.
The recent rebound has left some fund managers nervous that the market may have gone too far, and they believe the upcoming profit reporting season is likely to put a damper on things. Earnings are expected to be down more than 20 per cent, and outlooks won't be much brighter, they say.
And although there had been a lot of cash sitting on the sidelines, the spate of equity raisings in recent months has taken up a lot of that money, meaning there may not be enough around to prop up the market, should it head for another nosedive, the pessimists warn.
But not everyone is sharing those concerns. While the market has run too fast, it hasn't run too far, a Credit Suisse equity strategist, Atul Lele, argued yesterday. He reckons investors will be willing to look through the earnings season abyss, and continue to focus on a global recovery. Which may mean stocks trade sideways over the next three months but carry the market higher over the course of the new financial year, he believes.
Holding the line
The tussle for control of City Pacific's $630 million First Mortgage Fund continues. The Gold Coast finance group confirmed yesterday that it had received copies of the ballot papers cast at last week's unit holder meeting, which apparently handed control of the fund to Balmain Trilogy.
City Pacific, which has yet to verify that the vote was valid, said it was now reviewing the votes.
In the meantime, City Pacific said, it remained the "responsible entity" for the fund until the Federal Court determined "the matters which are before it".
This refers to legal action launched by City Pacific that claims the resolution was invalid as Balmain Trilogy engaged in misleading and deceptive conduct.
Chinese whispers
Following its profit warning a fortnight ago, there are now whispers the Chinese may be sniffing around Nufarm in an attempt to buy some farm chemicals on the cheap. The market value of the chemical supplier has slumped 24 per cent since it said last month its full-year profit would be down about 15 per cent because of lower demand for weedkiller.
Bank in overdrive
The Commonwealth Bank had to process a record number of transactions yesterday to make up for the disruptions to its online banking service, NetBank, just before the end of the financial year. Its chief information officer, Michael Harte, said last night the bank processed 1.5 million transactions, about 50 per cent more than on a normal day, after its internet service was interrupted on Monday because of suspicious traffic on the website which it now reckons was not a malicious attack.
NetBank has 4.4 million customers, but couldn't say how many were affected by its woes. Harte insisted no accounts were compromised and no client would have lost any money. It may be a different story for the bank, which suffered massive damage to its image through the episode.
In deep water
Amid the lingering uncertainty about the tax treatment of company share schemes since the federal budget, Paul Ramsay's Prime Media joined a corporate crowd in scrapping all of its 2.85 million outstanding executive share options yesterday. The board is looking at how to structure future incentives, but Xchange understands the damage for top managers including the chief executive, Warwick Syphers, would have been limited. With a strike price of around $3, the options were deep under water. Prime's shares closed at 49c yesterday, having lost 78 per cent over the past year.
xchange@smh.com.au
CBD
Michael Evans, Sydney Morning Herald, 1 July, 2009
THE Atanaskovic Hartnell school of letter writing has caught the eye of another judge, this time in a stoush over the size of the odd bill.
Chameleon Mining, whose board features such colourful figures as former footy player Ben Elias, had hired AH to help it deal with a bit of a stink with Murchison Metals.
As the stink ran on, AH billed Chameleon for more than $1.2 million.
But when three invoices amounting to $289,000 went unpaid, questions were asked and the stink ended up in the NSW Supreme Court after a request to pay up.
Even the ASX asked a few questions of Chameleon about the money owed.
Chameleon's MD Anthony Karam claimed in court that AH's invoices were "excessive".
A few phone calls had failed to resolve the matter and a year or so after AH was hired, rival firm Piper Alderman contacted AH to point out it was now acting for Chameleon and might AH be so kind as to hand over the documents relating to the case.
At which point the letter writing began.
A load of waffle
Among more notable epistles was this, from one unnamed AH bod.
"There is no doubt that section 333(1) of the Legal Profession Act is a fascinating section, capable of exciting the intellect and captivating the attention of the keen legal mind, and in any other circumstance we could find no fault with a lawyer who spent (as the author of [an earlier] letter did) more than an A4 page discussing its intricacies, complete with underlinings for emphasis.
"If only the author of that analysis had not found subsection 333(1) so fascinating, there is a possibility that they may have read as far as section 333(3), which provides that 'subsection (1) does not apply in relation to a sophisticated client'."
But it appears His Honour Bob Austin was not amused, noting, "AH's letter adopted a tone that I regard as regrettable.
"Stripped of the verbiage and irrelevancies, this conveys the short point that AH denied the application of s 333(1) because Chameleon was a 'sophisticated client' within section 333(3). The tone ... enhances the impression created by the delay in supplying it, namely that AH was acting unreasonably in relation to the statutory demand."
Prolific pen pals
His Honour went on to note that the exchange between carrier pigeons continued apace: "PA responded by an extraordinary long letter" to which "AH responded, also by an extraordinarily long letter".
It reminded us of another recent letter writing incident involving AH.
Late last year, when AH found itself in the unfamiliar surrounds of the Local Court as a disagreement with former partners continued its tour of the courts, one magistrate pointed out that the AH banana John Atanaskovic excelled as a man of letters.
Magistrate David Heilpern described Antagonistic's letters as "prolix" and "threatening".
So it's good that Tony Hartnell wrote the "engagement letter" to Chameleon's Karam and also Larissa Pickford, who was the AH partner responsible for the day-to-day running of the case.
Ouch! Glad that's over
There's no doubt an annus horribilis can leave one waking up with a painful derriere.
Among those happy to leave FY2009, um, behind them:
Phil Green: Tuscany, followed by Wimbledon and Lord's. Life's tough.
David Coe: on the taxpayer teat with his V8s business after skiing in Aspen.
Gordy Fell: enjoying the view at Point Piper.
Eddy Groves: things must be serious he's wearing a suit and tie to court. But still with cowboy boots. Now we know why.
Trevor Rowe: the missing link between market regulator ASX, chairmanship of QIC and the float of the year BrisConnections.
Lizzie Nosworthy: an impressive trifecta, riding Ventracor, Babcock & Brown and Commander Communications into the ground. Murmurs emerged about her spot on the Queensland Water Commission, given major floods this year.
Rod Eddington: pin-up poster boy of the boardroom despite skidmarks in the Rios.
Merrydeath Helicopter: vacated a few seats after an unfortunate judgment in the James Hardie matter.
Nicholas Less-is-Moore: "pay cut" of the year.
And that R.Sol Trujillo, a soothing salve of $3 million to ease the swelling on the way out.
Morris departs BT
Dirk Morris quit last night as boss of the Westpac-controlled BT Investment Management.
Morris resigned after the presentation of a "strategic plan" requiring a three- to five-year commitment, BT said. No successor was announced but a search is under way.
David Lording, a spokesman for Gail Kelly's Westpac, which owns 60 per cent of BT, declined to comment on the departure.
His departure comes after BT froze redemptions on $1.2 billion in its Global Return Fund.
Investors had tipped a minimum $50,000 into the fund that invested in hedge funds.
BT took $11 million in fees from the fund last year, and it was managed by a privately held Chicago firm, Grosvenor Capital Management, that disclosed virtually nothing about its track record and investment record.
First published by Smh.com.au on July 01 2009
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