Each year, Crikey puts together a list of truly extraordinary business, political and legal performers. With markets continuing to rebound strongly this year, there has been no shortage of exceptional performers in the business world. Over the next two days, Crikey will remind you of some of the forgotten stars of 2010.
Under-bidder of the year
To RAMS founder and former Allco investor John Kinghorn, who accused Allco’s receiver of taking too long to sell the company’s aircraft leasing business and selling for too low a price. (Kinghorn of course knows a bit about selling things — he pocketed a lazy $600 million floating RAMS in 2007, a couple of weeks before the company collapsed).
Kinghorn’s complaints did come as a surprise to Allco’s liquidator, Peter Gothard, who noted in response that the reason the sale took to long was because it was held up by legal issues raised by Kinghorn himself (and Allco’s former head of leasing, David Veal). Gothard also queried Kinghorn’s criticism of the price received for the asset, noting that not only was Kinghorn an under-bidder for the assets, but he wasn’t even the second highest bidder.
Litigant of the year
To Kristy Fraser-Kirk, the former David Jones secretary-turned-publicist who did more to publicise s-xual harassment than Julian Assange did for the Swedish legal system. Fraser-Kirk, who brought a stunning legal claim against the entire David Jones board, claimed that she had developed a recognised mental illness as a result of media attention.
While many felt sorry for Fraser-Kirk and her predicament (and it shouldn’t be forgotten that she was the victim), others pointed out that the media attention was largely the result of Fraser-Kirk requesting $37 million in damages from one of Australia’s highest-profile companies, and then hiring a publicist to tell the media about it.
The suit was 80 times higher than the largest ever s-xual harassment payout awarded in Australia and Fraser-Kirk’s lawyers and publicists issues a swathe of press releases, so would have been expected to garner at least a little media attention. Fraser-Kirk eventually settled the claim for a sum believed to be $850,000, which was more than double the next highest harassment payout.
Criticism of the year
To Hocking Stuart Real Estate agent Scott McEroy, who, along with thousands of Melbourne real estate agents, had their commissions and plans for a new BMW 5-Series thrown into disarray when a drawn AFL grand final caused scheduling problems for hundreds of auctions scheduled for the following week.
McEroy was especially upset at the AFL, and furiously issued a release stating “why the AFL didn’t put this grand final on either Friday or Saturday night is beyond me … a lot of people were schedule marketing campaigns to start this weekend given there would be no disruption.” AFL boss Andrew Demetriou failed to respond to McEroy’s stinging criticism, but one suspects the well-being of wealthy real estate agents was not the AFL’s primary consideration when deciding whether to cast aside 120 years of tradition of playing the grand final on a Saturday afternoon.
Letter-to-the-editor of the year
To Gary Shaw of Broadbeach who wrote quizzically in the Financial Review why the “Centro Properties [share price] still remains at 16¢”. Shaw pointed out “at its peak [Centro’s share price] it was about $7.40. The financial crisis has stabilised. Centro has sold off its assets and reduced debt.” Proving the adage about fools and money, Shaw probably didn’t bother to look too closely at Centro’s balance sheet, which quite clearly showed that the company was actually worth negative $2 billion. The cause of this unfortunate turn of events was Centro borrowing $20 billion to purchase assets, which were worth far less than that.
Dubious litigant of the year
To British multimillionaire Guy Hands. The former Goldman Sachs banker who founded private equity firm Terra Firma. Terra Firma sued Citigroup for $US11.2 billion in compensation after it purchased music label EMI (cruelly dubbed “Every Mistake Imaginable” by some less kind City types). Hands, a former Oxford alum, claimed that Citigroup “tricked” him into buying the EMI (which is now worth a fraction of what Terra Firma paid) by telling him that another private equity bidder (Cerberus) was also interested in buying the record label.
Investors in Terra Firma who are paying hefty management and performance fees for Hands’ investing expertise must be scratching their heads. It appears, however, that Hands is only an expert when it comes to selling his firm to investors, not so much apparently when he is buying grossly over-priced assets. Incidentally, Hands got so annoyed at having to pay UK taxes that he moved to tax haven Guernsey in 2008.
Continued tomorrow …
*Adam Schwab is the author of Pigs at the Trough: Lessons from Australia’s Decade of Corporate Greed, available in bookstores and online at Booktopia
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