Robert Holmes a Court once quipped that “there is only one thing worse than a public monopoly; a private monopoly”. At the time he was talking about utilities which provide power and water. He wasn’t thinking about his favourite sparring partner, the Australian Stock Exchange.
If he was alive today there is little doubt that Holmes a Court would be mightily amused by recent comments about the ASX, and the curious role it plays as a market regulator, listed entity itself trying to please its shareholder/owners, and a company touting for business in the form of more listed companies.
So far, everyone is being rather polite about the three roles played by the ASX.
But perhaps not for much longer because ever-widening cracks are appearing in the façade, and one of the world’s more interesting juggling acts could soon come crashing down.
First shots in the attack on the ASX came last week when the Government’s key business regulator, the Australian Securities and Investments Commission published a damning report on inconsistencies at the ASX, including problems with supervision, and the glaringly obvious conflict of marketing itself as a place to list on the one hand, and enforcer of the listing rules on the other.
The ASX, naturally, said it was on top of the matters raised and had addressed most of ASIC’s recommendations. It even disputes that it is a monopoly because there are “rival” stock exchanges in Newcastle and Bendigo where, at the last count about 40 companies were listed compared with the 1600, or so, listed on the ASX.
Leaving the monopoly argument to one side, it is worth noting that two issues in particular were raised by ASIC. One, that some ASX staff wanted “flexibility” in enforcing its listing rules, a notion totally rejected by ASIC. And two, the role of one division of the ASX promoting a proposed new listing by trying to influence another division administering the listing rules.
Briefcase, in the interests of helping ASIC, would like to toss in a third interesting example of how the ASX operates because it involves one of Perth’s favourite sons and a recent pin-up boy on the front cover of this newspaper.
On six occasions over the past 11 months, arguably a world record, Fortescue Metals Group, a company run by Andrew Forrest, has been queried by the ASX over share price movements, and the content of reports lodged with the exchange.
On every occasion there has been a reply which is accepted by the ASX.
There may be a certain naivety on the part of Briefcase but surely a point is reached where it becomes rather silly issuing a query notice, and the company issuing a reply which says roughly the same thing, time after time.
So far, the queries from the ASX have been likened to “speeding fines”, mainly because they relate to sharp upward share price moves, or to reports which do not comply with the technical side of ore reserves and resources.
FMG and Forrest have not, in any way, broken the law.
But that’s not the point.
The issue is not even whether FMG and Forrest fully understand the complexities of the ASX listing requirements.
At stake is whether the ASX actually has the power, the personnel in its tiny Perth office, or is even interested in fully policing what companies say, or do not say, in their reports to the investing public via the ASX, or what they post on their websites.
Last week, for example, FMG posted a document on its website headed “BHPB and the Pilbara Iron Ore Company – the NCC path”
It was dated September 22 and included a chart which showed future possible outcomes in FMG’s push to win access to BHP Billiton’s iron ore rail system.
According to the chart, Pilbara Iron (read FMG) respond to the NCC (National Competition Council) on October 4, the NCC issues a decision on November 4, it’s off to court (depending on the NCC’s decision) on December 4, and next year (no date) FMG wins access for its Mindy Mindy iron ore project.
Two thoughts.
Who, apart from Andrew Forrest, imagines getting access to BHP Billiton’s rail system will be that easy?
And, if it is going to be such a doddle, and FMG management is confident that Mindy Mindy is that close to being launched why wasn’t the chart and accompanying series of questions and answers filed with the ASX?
In the interest of helping inform the market (Briefcase is always willing to help the chaps down at the Perth office of the ASX), the latest FMG legal challenge flowchart is on the right-hand side of the front page of the FMG website (www.fmgl.com.au) under the heading “general”). ASX announcements are on the left-hand side of the front page.
JUST in case anyone thinks Briefcase is favouring BHP Billiton over FMG in the Pilbara railway games, this observation should square the ledger.
On the cover page which accompanies the latest BHP Billiton annual report are three of the most banal, fatuous and brainless corporate statements ever posted by an Australian company.
Shareholders are told that their company is (a) “creating tomorrow today” (b) “working for a sustainable future” and that is also doing it’s bit to (c) “help save the environment”.
Pardon Briefcase’s ignorance but we are dealing with a mining company aren’t we, or has BHP Billiton swapped placed with Friends of the Earth.
Observations.
The new slogan (creating tomorrow today) has to be the dumbest statement in a long history of dumb corporate proclamations made by Australian companies.
What on earth do we all do every day than work towards the next day – does it make anything any better?
On working for a sustainable future we have more of the mining industry’s big lie, which will eventually cause it great pain because every mine, by definition, is unsustainable over time.
Not even Joseph Goebbels, the father of propaganda, would have tried to mix mining with the concept of sustainability.
And on helping save the environment, well that one is all about opting out of receiving a printed copy of the annual report and using the web instead – a particularly useless communications tool when it comes to reading an annual report.
A more accurate heading would have been "help save us printing and postage costs".
“Propaganda is the art of persuading others of what one does not believe oneself”– Abba Eban