Brokerage provider Merrill Lynch allegedly set up a futures contracts trading account for an investor ‘without documentation from the client,’ and without ensuring the investor satisifed Australian Securities Exchange requirements on market knowledge. Merrill Lynch subsidiary Berndale Securities is suing investor David Waterhouse for $9.8 million owing on his account, and the allegations have been made by Mr Waterhouse’s lawyers, who are countersuing the broker for $3.9 million.
Paul Anderson, the former chief executive of mining company BHP Billiton, has been shortlisted for the chairmanship of British energy group BP, according to London analysts. Mr Anderson was credited with reviving the then troubled mining company during his term as chief executive of BHP between 1998 and 2002, and remains a non-executive director at the company. Mr Anderson was also in charge of the mining company during its merger with Billiton in 2001.
Port and rail infrastructure operator Asciano yesterday announced that it will raise at least $2 billion in capital, and abandon efforts to sell assets. Chief executive Mark Rowsthorn said that although a number of parties had expressed strong interest in purchasing assets from the company, changed market conditions meant a capital raising was now ‘cleaner, quicker and more certain for the company to get back to a normal and sustainable footing.’ Mr Rowsthorn said the funds would be used to reduce the company’s $4.9 billion of debt.
Perth-based engineering services firm VDM Group yesterday announced the cancellation of of its annual dividend in a bid to conserve cash. The company will also look at selling $20 million of property, and may undertake a capital raising in the future. VDM’s order book has shrunk considerably, from around $400 million last year to $230 million, as the resources sector has been hit by the downturn. However, the company is currently bidding for a number of contracts and says it is ‘cautiously optimistic.’
The $1.4 billion takeover bid for Macquarie Communications Infrastructure Group from the Canadian Pension Plan Investment Board will be voted on by investors tomorrow in Sydney. Although the offer has the support of MCIG’s independent directors, at least two major shareholders, including Lazard Asset Management and Tyndall Investment Management, are believed to be pressing for the offer of $2.50 a share to be increased.
Accusations by transport pallet supplier Brambles that its United States rival iGPS’s business model is unsustainable were yesterday rejected by the US company. iGPS is led by a former executive of Brambles and has had some success winning customers to its plastic pallet system. Brambles subsidiary CHEP, which uses wooden pallets, has also raised concerns about the safety of its rival’s plastic pallets, which iGPS also rejected as false.
The Federal Government is paying executive recruitment firm Egon Zehnder almost $3000 a day to help appoint the board of the national broadband network. The Government has set a deadline of June 30 for the search as it comes under pressure to show that the project is progressing. The board of the NBN Company is expected to have between three and seven directors, and will have responsibility for the implementation of the project.
Tax commissioner Michael D’Ascenzo has called for new legislative powers to enable the Australia Taxation Office to tax multinationals operating in Australia. The ATO has recently lost hundreds of millions of dollars in tax revenue after the courts ruled that gains made by overseas companies were not liable for taxation under Australian law. However, Mr D’Ascenzo says that legal advice ‘supports the view that the treaties as incorporated into the Income Assessment Act provide a separate taxing power.’
Former treasurer Peter Costello yesterday announced that he will not contest his seat at the next election. Mr Costello’s resignation has ended prolonged speculation of a leadership challenge against the current leader of the Liberal Party, Malcolm Turnbull. Mr Costello said his decision would ‘please both sides of the dispatch box.’ However, Federal Treasurer Wayne Swan said he was ‘surprisingly’ going to miss Mr Costello, who served as treasurer under the former Howard government for 12 years.