While no one does it quite as well as Pierpont (it’s worth buying a copy of today’s AFR just to read Trevor Sykes’ annual awards), some of Crikey’s more noteworthy performances of 2007 include:
Best Timing of the Year
To John Kinghorn, for having the foresight to float his RAMS mortgage business a couple of weeks before the credit market went belly-up. Kinghorn reduced his stake in RAMS from 93 percent to around 20 percent in the float and collected around $650 million in the process. The entire company is now worth around $100 million.
Worst Timing of the Year
To Centro boss Andrew Scott for deciding to lead the company into a disastrous $10 billion US spending spree shortly after the US entered its worst real estate slump in decades. Centro then followed up by borrowing short-term money during a credit crunch. After taking out company loans to buy shares, Scott turned a personal fortune of $40 million into a debt of around $5 million in less than nine months. Scott added to his stake in November and at least did shareholders the favour of going down with the ship.
Cherie Blair award for Poor Choice of Advisor
To former Prime minister John Howard who, after losing long time advisor Arthur Sidonis, seemed to also misplace his famous political radar. Howard ignored the pleadings of his paid advisers, senior ministers, back benchers, hundreds of opinion polls and the media to ostensibly take high-level political advice from wife, Janette. Instead of resigning a Liberal hero, Howard joined Stanley Melbourne Bruce as the second Australian Prime Minister to be unceremoniously dumped from his seat.
About-face of the year
To Mick Keelty for playing a significant role in the initial charging of part-time Doctor, part-time Mobile Phone Dealer, Mohammad Haneef. The AFP boss noted (wrongly) to the press that the Indian doctor’s SIM card was in the vicinity of the failed Glasgow airport bombing. A few months later, Keelty decided he wasn’t so sure, telling the Bulletin that he had actually warned prosecutors that the case against Haneef was “touch and go” and that there was insufficient evidence to proceed.
Investment Adviser of the Year
To UBS. It wasn’t all bad for the Swiss-owned bank. Its funds management arm, formerly led by Paul Fiani, bravely withstood the lure of a private-equity Qantas bid. Unfortunately, it was downhill from there – UBS was the main adviser on the RAMS float and famously, last week, issued a substantial shareholding notice in Centro, days before the company’s share price collapsed. Admittedly, UBS remains among the premier investment banks in the country, churning out solid profits – unlike its Swiss-based parent, which has blown more than US$13 billion and counting on sub-prime debt.
Award for Services to Psychological Illness
To Margaret Jackson who from her hospital bed, told the media that Qantas shareholders had a “mental problem” if they didn’t think that Qantas shares would drop if APA’s takeover bid was rejected. The bid failed but strangely, Qantas shares went up, hitting $6.00 in December on the back of five profit increases. No word as to whether Ms Jackson will be appearing as a spokeswoman for Prozac in 2008.
Humanitarian of the Year
To Magistrate Sarah Bradley for services to feminism and the Aboriginal Community. In her wisdom, Bradley found that a ten year Aboriginal girl was not really raped by a pack of nine men (including a 26 year-old) and that she “probably agreed to have sex with [them]”. Bradley managed the dubious honour of being criticized by Aljazeera.
Attempted Bargain Buy of the Year
To the Flight Centre manmagement team (led by directors, Graham “Skroo” Turner and Geoff Harris) and Pacific Equity Partners who generously offered shareholders $17.20 per share early in the year. Shareholders, led by Lazard, rejected the offer despite independent “expert” Ernst and Young valuing the company at between $10 and $13 per share and Turner claiming that the consortium would “need to take some short-term pain”. Presumably the pain Turner was referring to was an eye injury caused by an exploding cork from the case of Veuve Clicquot which had been pre-ordered by the consortium. After some “surprise” profit upgrades, Flight Centre now trades at $29.99 per share – a handy 75 percent premium to what management were generously offering months earlier.
Award Recipient of the Year
To Sydney-based hedge fund, Basis Capital. Basis’ perversely named “Yield Fund” became the first Australian victim of the sub-prime fiasco, being forced into liquidation in August. A mere two years earlier, the fund cleaned up at the 2005 AsisHedge awards, taking out the coveted “Fund of the Year” as well as the Best Fixed Income, High Yield & Distressed Fund. Editor of AsisHedge, Paul Storey, noted at the time noted that Basis had “long represented among the highest standards in terms of performance and structure in its particular area of asset management, not only in Australia but also internationally, in the hedge fund and alternative asset management industry; so the blue riband award was justly deserved and not before time.”
Garage Sale of the Year
To the ConsMin board, led by managing director Rod Baxter. ConsMin recommended to shareholders that they sell a controlling interest in the company to Brian Gilbertson’s Pallinghurst fund for $2.30 per share earlier in the year. Shortly after, the board begrudgingly announced that the price of manganese (their main money spinner) had tripled. Regardless, the board continued to recommend Pallinghurst’s offer until a shareholder revolt caused the company to suspend a meeting to vote on the deal. A few months later, the company was eventually sold for $5.00 per share after a bidding war erupted.
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