Well we never made it to the cycling event. The weather hasn't been that flash but we trust it went off Ok. Actually we sort of left it to the Institute to make the arrangements. We trust they got the cue. They have had quite a bit of contact with Gartz over the years, putting him on the odd committee here and there. That's what such an astounding accountant can expect it seems.
Because of the weather the demand has gone back on for another stage play for the New Year. Well its short notice but hear goes. The title is very dry but we trust that there will be something of interest along the way so read on.
Extract from the Accident Compensation Corporation, Investment Committee meeting, April 2004
A viewpoint of what would properly have happened at this meeting
extra2 How long do you think they would continue to buy from Feltex after they relinquish ownership.
extra Well there are economies if they announce the drop in profits at the same time as they announce that the offer has been fully underwritten but I think they will go on to allow the payout of one decent dividend first. Then the Securities Commission chairwoman will be able to say that all had been going well for some time before the sales fell away. She is really on the international scene these days and will not want to upset anyone in that arena.
Eion: Gee I didn't think there could be such sarcasm at this table.
extra Well I was getting rather carried away but that is the appropriate line of thought when one hears that a vendor is getting right out. And the Government and Commission is always most keen to dismiss any possible scandal. But I expect the minister will put a stop to such questioning with her next round of appointments if these comments get out.
Trevor The Credit Suisse name seems to be fizzing out at the on the local scene. They were of course mixed up in our National Mail purchase which blemished my chairmanship of this committee.
extra Which was the Corporation's broker, C S First Boston or Credit Suisse F B?
extra2 The one that wasn't used by the vendor of the script that was already known to be dud in some quarters, Cliff Cook.
David I thought you investment blokes made a proper mess of that one and said so to the press.
Nicholas: That's quite unfair. You have to lose a little to win a lot in this game. Its the way the odds work.
extra How did Suisse's brokerage operations here come about anyway?
extra2 The firm started off as Jarden and Co. Ron Jarden was the All Black who mastered the up and under but he died early. Chris Liddell was with CS First Boston for some time. He is with International Paper in the US now, could get snapped up by Bill Gates or whoever. And James Ogden came after that but he left in 95. It become First New Zealand a couple of years back but a New Zealand branch is not recognised on the Credit Suisse website.
extra Ogden has been long time on the New Zealand Post board hasn't he. Do you think you would sooner have Jim's job chairing that corporation David?
David Oh I have had a good innings here which is coming to an end and is all I can expect. We might have been duped by Suisse over National Mail and I don't want to see that happening again. They certainly didn't go out of their way to check how National Mail was performing, as our agent.
Trevor Same here, I have had to face quite a few jibes over that purchase. I hope you are not over-influenced by photos Nicholas. Perhaps they can be cut out of your copy.
extra2 New Zealand Post were the people to indicate whether National Mail had seized a hunk of the market. We could have shown some initiative and made an approach instead of just visiting National Mail. Suisse might have had contacts at NZ Post.
extra No need to I suspect, they were in thick with Cliff Cook and Metlifecare whose chairman was on the National Mail board. Brokers with clout I think Mr Cook called them. I wonder who got clouted.
extra2 Has Don Turkington been involved in preparing this prospectus Eion?
Eion: No not at all. He left us last year. He has turned his hand to helping the Institute of Chartered Accountants prepare recommendations on Corporate Transparency among other things I think. I don't think that that report will be very revolutionary.
extra I can just see one of the lady cabinet ministers from Christchurch who appoints us saying "turn again Don Turkington, director of the Accident Compensation Corporation and chairman of its Investment Committee".
David Yes I could well imagine my long term colleagues doing that. There will be a place for his cat too on the investment team if we don't get this Feltex decision right.
Eion: Well I am sure cats have been very partial to Feltex over the years and will continue to be so. The vendors of the company are very decent people let me assure you. We have to consider the holding gains if the offer is over-subscribed.
Garry Yes well I think Nicholas and the team have plenty to go on now. I often wonder what this has all got to do with accidents except that we don't want to meet with one on this issue or any other.
Trevor I can feel another clout coming on!
Perhaps a short footnot to say Feltex's 2004 annual report showed ACC to hold 3.81% of the sharecapital as at 31 July that year, a holding which would have cost $9,680,000 at the issue price of $1.70. ACC did not feature in the top 20 shareholders in the 2005 Annual Report of Feltex which indicates that it has sold off extensively in the meantime with the buyers sharing in a loss of that amount as it stands at the moment.
Browsers are welcome to send us a video of any production and we shall try and present it on line.
We wish to end the issue with an expression of about this acticle from the highly respected Brian Gaynor on debt fuelled private equity firms. He warns against this phenomena but refers extensively to the Feltex and Trans Rail overpriced sales as examples of the ills of private eqity refering to the eagerness of stockbrokers to promote highly questionable offers to clients. Well we say that they should not be promoting highly questionable offers whether the vendor is a slick overseas based private equity firm, or just Tom, or Dick, or Harry. The responsibility lies with the brokers, auditors and other accountants and professional people and they should be held to account. He seems to liken equity firms to lions at the zoo who if they are not pampered in every respect and feel aggrieved by a mounting interest bill or whatever are likely to lash out and endanger people, in this case by making highly questionable offers.