AMP Limited (AMP):
AMP faces the risk of a new fee scandal in its superannuation business, as the beleaguered wealth group yesterday conceded that costs — including to repay customers in its advice business — were nearing $1 billion. AMP’s acting chief Mike Wilkins raised the ire of senior counsel assisting Michael Hodge QC at the Hayne royal commission yesterday, as he lifted the lid on a string of AMP compliance failures and the incorrect levying of fees. Mr Wilkins said AMP’s total cost estimate for providing customers inappropriate or no advice stood at $778m, inclusive of re-mediation, lost earnings, reviewing customer accounts and a range of other costs. This could cost as much as $1.18 billion if the remediation program took as much as nine years, he added.
Australia and New Zealand Banking Group (ANZ):
ANZ will have to pay compensation to two million accounts where customers have been ripped off by the bank, chief executive Shayne Elliott has told the financial services royal commission. Appearing this morning as part of commissioner Kenneth Hayne’s final round of public hearings, Mr Elliott said ANZ had in the past taken far too long for the bank to discover, report and remediate customers when the bank had done the wrong thing. Counsel assisting the commission, Rowena Orr, QC, took Mr Elliott to a case study in which five different processing errors by ANZ resulted in large numbers of customers being overcharged or not receiving agreed discounts on their home loans. Mr Elliott said he did not know how many customers were hurt by these processing errors. “If we look at all remediations that are underway, including some others beyond that five, I know that the total number of accounts affected is approaching two million, many of which will be double counted,” he said. “You know, it might be a customer with a credit card remediation and a home loan remediation, for example.”
CSR Limited (CSR):
Building materials company CSR has sold its struggling Viridian Glass business to private equity firm Crescent Capital Partners for $155 million. The company said that following the deal, it expects to realise a pre-tax loss of between $20m and $30m in the financial year ending March 31, 2019, primarily due to the disposal of Viridian-related deferred tax assets. Initial cash proceeds of $80m are expected to be received in fiscal year 2019 with deferred settlement of $75 million in the first half of the 2020 financial year, the company said. “This transaction will enable Viridian to align its footprint and cost structure to operate more effectively as a stand-alone business,” CSR managing director Rob Sindel said. The deal includes the Viridian property site at Dandenong in Victoria but CSR will retain the property at Ingleburn in New South Wales, which the company said has an estimated market valuation in excess of $60m.
Harvey Norman Holdings Limited (HVN):
Billionaire Gerry Harvey has shrugged off Harvey Norman’s first shareholder strike and vowed to push ahead with further offshore expansion. The protest vote levelled at the retailer’s annual meeting yesterday prompted veteran adman and shareholder John Singleton to leap to the chain’s defence. The fiery meeting in the heart of the Sydney CBD saw 50.63 per cent of shares vote against the company’s remuneration report, earning the company its first strike. The “no” vote was well over the 25 per cent required for a first strike, meaning a repeat next year would trigger an automatic spill of a board that has remained -unchanged since 2007. The company narrowly avoided a similar fate at last year’s AGM.
Keybridge Capital Limited (KBC):
Keybridge Capital shares have been suspended and the company is being investigated after it was alleged the listed investment firm backed by Nicholas Bolton did not count Wilson Asset Management’s (WAM) shares at its annual meeting last week. WAM holds 21.78 per cent of Keybridge Capital and the stake has been at the centre of a long-running battle that pitted Geoff Wilson against Mr Bolton, Keybridge’s chairman John Patton and major shareholder and Perth investor Farooq Khan. Mr Bolton owns about 3.6 million shares in Keybridge.
National Australia Bank Ltd (NAB):
NAB chairman Ken Henry said the bank’s board should have cut executive bonuses earlier in response to a wave of scandal sweeping the bank that included charging fees to the dead. The board made small cuts to the pay of bosses, including the then-head of the scandal-ridden wealth business, Andrew Hagger, in 2017, before returning in October this year to swing the axe through executive bonuses. In an at-times torrid second day of evidence to the financial services royal commission yesterday, Dr Henry said NAB’s board gave senior executives their full bonuses in 2016 even though directors were unhappy about a rising tide of breaches that had turned its compliance audits into a sea of red.
Retail Food Group Limited (RFG):
Further asset sales appear to be in the planning stage at the troubled Retail Food Group with its Hudson Pacific bakery arm thought to be on offer through insolvency firm KordaMentha. It is believed KordaMentha had been engaged not only for the asset sale, but to examine the balance sheet as the company remains under pressure from its lenders to sell parts of the business. Also for sale are the Retail Food Group’s Crust Pizza, Pizza Capers and Donut King brands at a time when franchise operations are struggling in a highly competitive market. Working on the sale of pizza operations is KPMG and it is understood the main contender is Allegro Funds Management, which owns Pizza Hut and Eagle Boys Pizza in Australia.
Rio Tinto Limited (RIO):
Rio Tinto has appointed former CSIRO chairman and 2011 Australian of the Year Simon McKeon as an independent non-executive director. Mr McKeon, who was chairman of the federal government’s scientific research body between 2010 and 2015, was founding president of the Australian Takeovers Panel, was previously an executive at Macquarie Group and chairman of AMP for two years until 2016. “His extensive experience of the Australian business and political environment as well as civil society, will bring invaluable insight in relation to Australia, home to some of Rio Tinto’s key assets,” Rio Tinto chairman Simon Thompson said in a statement.
Seek Limited (SEK):
Seek chief executive Andrew Bassat says falling house prices, the volatile sharemarket and battered consumer confidence has led to a drop-in advertising volumes for the online recruitment giant going into Christmas, but he is confident of it rebounding in the new calendar year. Seek shares closed 1.6 per cent higher yesterday at $18.55 after the company reaffirmed it remained on track to post annual revenue growth of 16-20 per cent, EBITDA growth of 5-8 per cent and flat profit growth in 2019 because of increased levels of investment across its businesses. But Mr Bassat said the recruitment market had definitely been softer in recent weeks.
Telstra Corporation Ltd (TLS):
Telstra is adding Foxtel’s sports-streaming service, Kayo Sports, to its broader content portfolio with the telco saying the app will complement rather than detract from the sporting content it already provides. Telstra, the exclusive partner of Kayo, already streams AFL, NRL, netball and A-League soccer to its customers. The telco’s consumer and small business group executive, Michael Ackland, told The Australian he did not expect Kayo to steal viewers from the telco. According to Mr Ackland, the main difference is price, with Telstra customers accessing the content through the telco’s Live Pass apps for free. “We offer these services to our customers free of charge. Where Kayo fits in is that it offers our customers access to mo re than 50 sports and a bunch of other viewer experiences — our focus is making sure our customers get access to as much content as possible.”
(Source: AIMS)
AMP faces the risk of a new fee scandal in its superannuation business, as the beleaguered wealth group yesterday conceded that costs — including to repay customers in its advice business — were nearing $1 billion. AMP’s acting chief Mike Wilkins raised the ire of senior counsel assisting Michael Hodge QC at the Hayne royal commission yesterday, as he lifted the lid on a string of AMP compliance failures and the incorrect levying of fees. Mr Wilkins said AMP’s total cost estimate for providing customers inappropriate or no advice stood at $778m, inclusive of re-mediation, lost earnings, reviewing customer accounts and a range of other costs. This could cost as much as $1.18 billion if the remediation program took as much as nine years, he added.
Australia and New Zealand Banking Group (ANZ):
ANZ will have to pay compensation to two million accounts where customers have been ripped off by the bank, chief executive Shayne Elliott has told the financial services royal commission. Appearing this morning as part of commissioner Kenneth Hayne’s final round of public hearings, Mr Elliott said ANZ had in the past taken far too long for the bank to discover, report and remediate customers when the bank had done the wrong thing. Counsel assisting the commission, Rowena Orr, QC, took Mr Elliott to a case study in which five different processing errors by ANZ resulted in large numbers of customers being overcharged or not receiving agreed discounts on their home loans. Mr Elliott said he did not know how many customers were hurt by these processing errors. “If we look at all remediations that are underway, including some others beyond that five, I know that the total number of accounts affected is approaching two million, many of which will be double counted,” he said. “You know, it might be a customer with a credit card remediation and a home loan remediation, for example.”
CSR Limited (CSR):
Building materials company CSR has sold its struggling Viridian Glass business to private equity firm Crescent Capital Partners for $155 million. The company said that following the deal, it expects to realise a pre-tax loss of between $20m and $30m in the financial year ending March 31, 2019, primarily due to the disposal of Viridian-related deferred tax assets. Initial cash proceeds of $80m are expected to be received in fiscal year 2019 with deferred settlement of $75 million in the first half of the 2020 financial year, the company said. “This transaction will enable Viridian to align its footprint and cost structure to operate more effectively as a stand-alone business,” CSR managing director Rob Sindel said. The deal includes the Viridian property site at Dandenong in Victoria but CSR will retain the property at Ingleburn in New South Wales, which the company said has an estimated market valuation in excess of $60m.
Harvey Norman Holdings Limited (HVN):
Billionaire Gerry Harvey has shrugged off Harvey Norman’s first shareholder strike and vowed to push ahead with further offshore expansion. The protest vote levelled at the retailer’s annual meeting yesterday prompted veteran adman and shareholder John Singleton to leap to the chain’s defence. The fiery meeting in the heart of the Sydney CBD saw 50.63 per cent of shares vote against the company’s remuneration report, earning the company its first strike. The “no” vote was well over the 25 per cent required for a first strike, meaning a repeat next year would trigger an automatic spill of a board that has remained -unchanged since 2007. The company narrowly avoided a similar fate at last year’s AGM.
Keybridge Capital Limited (KBC):
Keybridge Capital shares have been suspended and the company is being investigated after it was alleged the listed investment firm backed by Nicholas Bolton did not count Wilson Asset Management’s (WAM) shares at its annual meeting last week. WAM holds 21.78 per cent of Keybridge Capital and the stake has been at the centre of a long-running battle that pitted Geoff Wilson against Mr Bolton, Keybridge’s chairman John Patton and major shareholder and Perth investor Farooq Khan. Mr Bolton owns about 3.6 million shares in Keybridge.
National Australia Bank Ltd (NAB):
NAB chairman Ken Henry said the bank’s board should have cut executive bonuses earlier in response to a wave of scandal sweeping the bank that included charging fees to the dead. The board made small cuts to the pay of bosses, including the then-head of the scandal-ridden wealth business, Andrew Hagger, in 2017, before returning in October this year to swing the axe through executive bonuses. In an at-times torrid second day of evidence to the financial services royal commission yesterday, Dr Henry said NAB’s board gave senior executives their full bonuses in 2016 even though directors were unhappy about a rising tide of breaches that had turned its compliance audits into a sea of red.
Retail Food Group Limited (RFG):
Further asset sales appear to be in the planning stage at the troubled Retail Food Group with its Hudson Pacific bakery arm thought to be on offer through insolvency firm KordaMentha. It is believed KordaMentha had been engaged not only for the asset sale, but to examine the balance sheet as the company remains under pressure from its lenders to sell parts of the business. Also for sale are the Retail Food Group’s Crust Pizza, Pizza Capers and Donut King brands at a time when franchise operations are struggling in a highly competitive market. Working on the sale of pizza operations is KPMG and it is understood the main contender is Allegro Funds Management, which owns Pizza Hut and Eagle Boys Pizza in Australia.
Rio Tinto Limited (RIO):
Rio Tinto has appointed former CSIRO chairman and 2011 Australian of the Year Simon McKeon as an independent non-executive director. Mr McKeon, who was chairman of the federal government’s scientific research body between 2010 and 2015, was founding president of the Australian Takeovers Panel, was previously an executive at Macquarie Group and chairman of AMP for two years until 2016. “His extensive experience of the Australian business and political environment as well as civil society, will bring invaluable insight in relation to Australia, home to some of Rio Tinto’s key assets,” Rio Tinto chairman Simon Thompson said in a statement.
Seek Limited (SEK):
Seek chief executive Andrew Bassat says falling house prices, the volatile sharemarket and battered consumer confidence has led to a drop-in advertising volumes for the online recruitment giant going into Christmas, but he is confident of it rebounding in the new calendar year. Seek shares closed 1.6 per cent higher yesterday at $18.55 after the company reaffirmed it remained on track to post annual revenue growth of 16-20 per cent, EBITDA growth of 5-8 per cent and flat profit growth in 2019 because of increased levels of investment across its businesses. But Mr Bassat said the recruitment market had definitely been softer in recent weeks.
Telstra Corporation Ltd (TLS):
Telstra is adding Foxtel’s sports-streaming service, Kayo Sports, to its broader content portfolio with the telco saying the app will complement rather than detract from the sporting content it already provides. Telstra, the exclusive partner of Kayo, already streams AFL, NRL, netball and A-League soccer to its customers. The telco’s consumer and small business group executive, Michael Ackland, told The Australian he did not expect Kayo to steal viewers from the telco. According to Mr Ackland, the main difference is price, with Telstra customers accessing the content through the telco’s Live Pass apps for free. “We offer these services to our customers free of charge. Where Kayo fits in is that it offers our customers access to mo re than 50 sports and a bunch of other viewer experiences — our focus is making sure our customers get access to as much content as possible.”
(Source: AIMS)
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