asx shares trevor rowe's lack of clues

ASX shares Trevor Rowe's lack of clues
Article from: Herald Sun


Terry McCrann

April 21, 2009 12:00am

IT IS impossible to see how Trevor Rowe can continue as a director of the Australian Securities Exchange after the disclosure of his extraordinary and utterly unacceptable behaviour as chairman of BrisConnections.

This is rendered even more emphatic by the fact that the 'disclosure' came out of his own lips. Demonstrating that he hasn't a clue as to its complete inappropriateness. Indeed, arguably, hasn't a clue, full stop.

That might explain why he hadn't lodged his resignation with ASX yesterday. It does not explain, far less excuse, the apparent failure of ASX chairman David Gonski to ask for it, first thing yesterday.

Depressingly, it has to be said, that's hardly a surprise. The ASX would share Rowe's total incomprehension.

Let's try to explain to both. Although one has the distinct sense they both will have about the same comprehension as a two-year-old instructed on the appropriate etiquette at the court of Louis XIV.

Rowe came out with two amazing revelations to Alan Kohler on the ABC's Inside Business program on Sunday.

First that he had known since Easter Saturday that main-chancing irritant Nick Bolton had lodged proxies to vote his 20 per cent stake in BrisCon against his own motions to wind-up the company.

Yet he, Rowe, saw no need to disclose that extraordinary fact to BrisCon unit-holders, far less the market at large.

To say nothing of the fact that the turnabout would almost certainly defeat the motions; and not exactly incidentally, save BrisCon from the utter mess of being wound up. And just to emphasise for Rowe's 'enlightenment' - a likely futile ambition - the proxy lodging was a fact.

Rowe's pathetic justification for the non-disclosure was that Bolton could always turn up to the meeting on the following Tuesday and vote the opposite way anyway.

Earth to Rowe: that 'possibility' was and remains completely irrelevant to the need - indeed basic governance requirement - for BrisCon to have immediately informed unit-holders.

The guy who had been running a campaign to wind the company up, had now lodged proxies voting against his own motions, and Rowe didn't - apparently, still doesn't - understand that was information that unit-holders were entitled to receive immediately.

For it suggested a fundamental - game-changing - shift in Bolton's behaviour; and the reality of the BrisCon situation. And a colossal failure of disclosure by a board to its unit-holders.

Rowe's complete cluelessness on an issue which goes to the absolute core of the ASX both as a business and as a regulator - disclosure - disqualifies him from continuing as an ASX director. Depressingly, I have to correct that. Should go to the absolute core. For arguably Rowe is perfectly in tune with the ASX's corporate culture.

That alone is bad enough. But there's a 'back story' which renders Rowe's conduct even less acceptable.

A back story, staggeringly and even more damningly, that he himself explained - up to a point - to Kohler.

That he, Rowe, had been negotiating with Bolton to achieve exactly the outcome that produced his change of vote. To sell them.

So that when his proxies arrived, Rowe must have known that there was little prospect of Bolton 'changing his mind'. That Bolton 'must have' done a deal.

Indeed, did Rowe know or find out why Bolton had dumped his own resolutions? Did he ask who had bought him off? And if not, why not?

It gets even murkier, with Rowe himself again disclosing he had earlier acted as some sort of intermediary/agent for Macquarie Bank.

Which was variously trying to construct a deal to buy Bolton and other small investors out of their BrisCon units and the looming $1 liability, and/or just buy his votes.

MacBank had asked Rowe - as it, MacBank, had an "association problem" - whether Rowe minded "having a conversation" with a Bolton adviser.

He, Rowe, spoke to this adviser, asking him what Bolton wanted for his votes. The figure suggested was, according to Rowe, "pretty excessive". So "I gave him a lower number". The adviser came back with, Bolton would need at least $5 million.

"We thought about it and we decided not to engage further," Rowe told Kohler, digging away furiously.

He went on to explain that it would have had to have been a "two-to-three" number.

"We thought about it"? We? "We decided not to engage"? We? Engage?

What on earth was Rowe doing? What on earth did he, using the word loosely, think he was doing? As chairman of BrisCon negotiating for MacBank?

If MacBank "had an association problem" - because its 8 per cent of BrisCon joined with Bolton's 19.9 per cent would take it through the Takeover Code's 20 per cent threshold - how was that 'avoided' by Rowe acting as MacBank's, there is no better word, proxy?

So when, some time after all this, Bolton's proxies dumping his own resolutions landed on Rowe's desk, did he have the slightest interest in whether some deal had been done?

That unit-holders might have just the slightest interest in it?

This begs a number of other questions. Did Rowe/BrisCon seek to find out what has caused Bolton's change of direction. Did either tell anyone about it, ahead of Tuesday?

One question it does not beg. Rowe's failure to understand some pretty fundamental disclosure responsibilities, to say nothing of the murky role he played on behalf of MacBank, 'invites him' to leave the ASX board. Immediately.