I will take the liberty of surfing in and adding my two cents...

I will take the liberty of surfing in and adding my two cents worth, because I have been mulling the most recent developments and, given all the money COK has cost me, I feel entitled to vent in their direction ! So enjoy or scroll on by as you see fit

The format of the latest announcement on the CEO appointment crystallises my thinking on what has occurred behind the closed doors of the major shareholders who now effectively control the Board.

Page 12 of the Presentation to Investors of February 5th had a curious drafting of the Board Restructure:


• Independent Chairman
• A Director independent of the major shareholders
• Noble and Liberty Metals & Mining each have the right to appoint a Director to the extent an individual etc etc
• Harum has the right to appoint a Director, etc
• SK Networks has the right to appoint a Director etc

There is a notable role missing from this list - MD.

At the time I wondered if it was a typo or whether it was just a given that there would be an MD for a listed company, so I didn't try to pursue the matter. Who needs to potentially be told : "well duh - of course there is an MD !"

As it now turns out, hidden in plain sight while the capital raisings were on was not only the elimination of the MD position, but the MD himself ! As an aside, I guess the Board feels it has properly informed the market because of Page 12, but I would have to say it was hardly a transparent declaration of a major restructure of internal roles in the middle of a market sensitive period. Tells us something about how the Board is viewing the retail shareholders.

So, Andrew Lawson. Appointed MD in April 2012. Keeps the company afloat and the mine development moving forward through ever-more difficult times for the coal sector. Including bringing in major new shareholder Noble. What could go wrong ?

On reflection, I suspect the confidence of the Board and the majors were lost with the feedback to the remuneration resolutions put to the AGM last year.

These Resolutions included an increase in Director's Fees and a grant of Performance Rights.
The effect of all this for Andrew Lawson is summarised on Page 24 of the Explanatory Statement - his remuneration would double from $540 k, to $1.1 million.

At the very same time that the value of the rest of the shareholders investment was sinking like a stone, and had been since his elevation to MD in early 2012. I certainly voted against these resolutions; I suspect a lot of others did too. And I suspect the institutions really kicked up a fuss, as the remuneration Resolutions were all dropped at the AGM.

These Resolutions were so tinned-eared, it is amazing the Board let them go through to the AGM in the first place - so I don't think they were much concerned about the retail shareholders' reaction. Conversely, the instos do not like seeing their COK investment trashed - bad KPI juju for fund managers - and I would bet that feedback did make it's way back.

Do I have any other reasons for thinking there has been a loss of confidence and a change of ostensible direction from the Board and the majors ? Yes.

The Company update of March 16th pointedly noted:

"The newly constituted Board is leading by example with Independent Directors agreeing to a reduction in remuneration and shareholder nominee Directors agreeing to waive any right to remuneration."

That seemed like a pointed dig at - ahem - 'previous management'.

( The Company finally got around to mentioning the wash out of the Moura Line in that update too. Not exactly 'timely update to the Market', but one now starts to suspect things have been a bit chaotic on the COK corporate side since early February when the line got ruled through the MD position. )

More to the point, the announcement of Peter Kane's appointment as CEO seems to be explicit about more modest remuneration outcomes, at least pending settlement of Kane's incentive package.

( Also as an aside, I note a new, Sydney-based media contact point appears on the announcement. This seems consistent with a view that external messaging, as evidenced by the share price, has been somewhat lacking. Not blaming the previous media people myself looking from the outside in, but suggests a 'washing of the spears' by the Board ).


So, the question: "a very convenient redundancy" ?

I do know enough about the commodity traders to know you don't spend a decade or more with the uber-ferals at Glencore if you lack ticker, lack a work ethic and have self-esteem issues.

So - ability to keep the pumps running and the 'Costa Cockatoo' upright and afloat after someone else navigated the ship on to the rocks of stranded assets, mostly in the Surat Basin ? That is a tick 'Yes'.

Could we have also suffered a degree of hubris about our importance to the enterprise ( L'Etat, c'est moi ) ? In the Greek tragedy, hubris is followed by Nemesis. That seems to have been the short, sharp trajectory since the ill-conceived AGM resolutions.

An industry contact that admittedly comes to me with what is now third hand opinion has used the word "gutted" to describe the state of Mr Lawson's fall from grace by those allegedly in the know. For what rumour is worth - in this case, I think it rings true.

So no - no 'convenient redundancy'. The final page closed on almost all the original COK people - heck, it only took AL a little over three years to go from Big COK to feather duster being pointedly shaken out by the Board.

The question now is what do Noble and Liberty intend for the Company. A ray of hope is the fact that they, via the Board, at least are making more self-aware noises to the Market than were being made before. Maybe there is a listed future for COK ?