Watchdog barking up wrong tree You could never accuse our corporate regulator of acting in haste.
Sydney Morning Herald - 15/01/09 You could never accuse our corporate regulator of acting in haste.
A year after it became obvious to all and sundry that short selling rules were being seriously flouted, the Australian Securities and Investments Commission finally has cranked itself into action.
Curiously, though, it has steered clear of any decisive action, other than banning short selling outright to begin with and now ludicrously limiting the ban to financial stocks.
Instead, it has focused on what is known in financial circles as "rumourtrage" - spreading rumours that would likely affect the share price of a public company and then trading on that. Effectively, it is a form of insider trading except that the information may be false.
Again, the corporate watchdog wins no prize for speed. Your columnist first raised this as an issue on February 21 last year after the then Babcock & Brown boss, Phil Green, thundered on about false rumours being spread about his company's finances. As it turns out, the rumours weren't so false at all.
Now we have the situation where ASIC has trained its guns on journalists, one from this newspaper and one from The Australian.
One reportedly is under review for writing a column suggesting James Packer may be considering selling his remaining stake in Consolidated Media, an item that saw its share price drop 2c. The other apparently is under investigation for writing that Macquarie Group may have difficulty refinancing a portion of its huge debts "at a decent price." It was written the day after Lehmann Brothers collapsed, when the share prices of all investment banks were under pressure and debt markets were frozen.
You don't have to be a detective to deduce the investigations probably were instigated as a result of complaints from the Packer camp and Macquarie.
How ironic then that both outfits have been at the forefront of media manipulation for years, when they were spreading "positive" rumours about themselves.
During the boom, Macquarie turned the selective "leak" of its deals into an art form. Compliant journalists were rewarded with news of the latest billion-dollar deals, a day before the official announcement. These were duly written up in glowing terms as "exclusive" stories.
Often they weren't deals at all but merely proposals and the leaks were designed to massage opinion in the business world.
The bank never complained, never issued any rebuttals and certainly never referred any of the "leaks" to ASIC.
The Packer group of companies was equally adept at promoting itself through the business media, whether it was PBL's latest casino deal or a play by another part of the group.
Again, neither ASIC nor the Australian Securities Exchange ever queried how the media got hold of this "information", which clearly was price sensitive and clearly beneficial to the companies involved.
Macquarie's business model is in tatters. Its share price is just a third of its peak and there are no deals to be done apart from internal reshuffling of assets.
The Packer-controlled Crown similarly has discovered casinos aren't the cash cows they appeared to be during the boom with some of its recent offshore purchases written down to zero.
Both Macquarie and Crown are under pressure. Their power to manipulate the press has been diminished because the news at the moment is almost all bad.
For the past year as global markets were in meltdown, ASIC was nowhere to be seen. Its response to the manipulation of markets via undisclosed short selling - Macquarie as an investment bank was heavily involved in the practice - was to issue a warning in March. Then nothing.
Apparently it also is looking at rumours spread about Challenger, another Packer-controlled company, and Babcock & Brown.
B&B is teetering on the verge of receivership. Rumours didn't cause that. The company was an overgeared bull market comet that simply burnt itself out.
If the regulator wants to look at anything about B&B, perhaps it should investigate Phil Green's claims last year that the company would make $750 million profit. That one was a tad wide of the mark.
This is an article that was printed recently in the fairfax press,and it confirms my opinion what ASIC is S++T
The end game is legal conflict ,one that was mentioned was Denny and co I think -noot sure but Idare say that after the outrageous rip on the cattle investors,-by the way I have no interest in the cattle that existed.
as the previous contributors have indicated we are now in a crystalising state taking stock --------and not GTP stock
GTP Price at posting:
18.5¢ Sentiment: None Disclosure: Not Held
