second strike comments

With the 10th anniversary of the listing of Daily Planet Ltd, now Planet Platinum Ltd [PPN], coming up in May and Friday's ASX announcement regarding PPN's reinstatement following a lengthy suspension for failure to lodge its annual report, my blood is boiling with the CEO's comments in the annual report should there be a second strike on the remuneration report. I wonder if the other 2 directors, Callanan & Pitliangas, share the CEO's contempt for the views of minority shareholders? Perhaps not.

For those who are not aware, the largest shareholder in PPN is John Trimble, holding 80% of the issued shares. He is also the Company Secretary, CEO, Chairman of the Board and Managing Director. He is also the person described as "ASLEEP AT THE WHEEL" in last year's VCAT decision.

PPN has two avenues of operations. It owns and operates Showgirls Bar 20 at 46 King St, Melbourne, and owns the Daily Planet brothel building at 7-12 Horne St, Elsternwick, Melbourne, which it leases to an operator. That operator is John Trimble through his single shareholder company Metropolis City Promotions Pty Ltd.

PPN has been suspended for 12 of the past 15 months for failing to lodge its annual reports on time. The latest suspension was lifted from today and the 2012 AGM is set to be held in the Bar 20 premises in Melbourne on 8 March.

Last year, disgruntled shareholders recorded a strike of more than 70% against the 2011 Remuneration Report. If similar sentiment prevails on 8 March, a second strike will be recorded on the 2012 report and the spill motion will be moved. On the numbers, there is likely to be a successful spill. In that eventuality, PPN will become only the second company after PENRICE SODA to have a Board spill forced upon it.

Because Trimble can vote his 80% shareholding in favour of the existing Board members, there is no doubt that they will be re-elected by a large margin. In fact, Trimble has said in advance (see the introduction to the 2012 Annual Report) that he will simply reinstate the old Board. As CEO, he will not stand for re-election. This throws into relief the issue of whether the two-strikes legislation as it stands serves a useful purpose or whether it should be modified.

At present, Trimble owes PPN $2.5m. This debt originated with the creation of the company in 2003 and was due to be repaid in 2008. However, the loan term has been extended repeatedly by Trimble's co-directors at PPN and Trimble has made no direct repayments against the debt since 2004.

Shareholders think it is a dereliction of duty to the company and its shareholders that the non-executive directors of PPN not only refuse to call in the CEO's debt but have repeatedly extended the loan term and continue to recommend that Trimble should receive an annual payment for $450,000 for his services to PPN.

Minority shareholders believe the existing two-strikes legislation does serve a purpose in that it throws a spotlight on Board practice within PPN. Accordingly, they will proceed with the strike vote on the basis that the entire Board needs changing.

Having sat through the VCAT hearing last year and listened to the various parties, including CEO John Trimble, give evidence and after having noted Judge McNamara's "ASLEEP AT THE WHEEL" summation of the CEO, it is my view that the independent directors Callanan and Pitliangas should tear up the service agreement with Trimble's company, Metropolis City Promotions Pty Ltd and charge compound interest on Trimble's debt to PPN of around $2.5 million. If Callanan and Pitliangas, are not prepared to do that, they need to explain to shareholders why they are not acting in the best interests of the company.