CBD

BMW not motoring to replace rival

BMW not motoring to replace rival

Fallout from Alan Jones's remarks about dad dying of shame included a Deutsche marque-sized hole in his radio brekkie show's ad schedule - and the Parrot's garage - when Mercedes Benz cancelled its advertising on his program and took back the car it had provided.

With BMW advertising elsewhere on 2GB - and with advertisers back spruiking on Jones's program after an ad-free period to help calm the furore the remarks caused - it might seem a logical fit.

Or not.

"I don't see us taking that spot any time soon," BMW's general manager of marketing, Tom Noble, told CBD.

Noble and his boss, the Australian managing director Phil Horton, were soaking up the spring sun at the Caulfield Cup on Saturday, pressing the flesh at BMW's marquee near the finishing post.

While many retailers complain Australian consumers have deep pockets and short arms, the jovial pair reckoned the luxury car market is doing fine, thanks in part to the introduction of a new model in its best-selling 3 Series line.

However, they did admit dealers have to work a bit harder to get potential customers over the line.

Just don't mention "sales". "Sale", with its connotations of cheapness, is a word that apparently does not exist in the luxury car business.

"It's an opportunity," Noble said. "There are always opportunities."

Limited fizz

Other corporates flying the flag at the Cup included David Jones and News Limited, which had their marquees up the other end of the Caulfield straight.

But the busiest operation of the day was the Pegasus Club bash hosted by the French boozemaker Pommery, which CBD snuck into through a loose tent-flap.

It was bustling, if not bristling, with decidedly non-corporate champagne guzzlers sourced from the worlds of fashion and entertainment.

CBD didn't brave the News Ltd den, but if the behaviour of the Herald Sun's editor, Damon Johnston, is any guide, it must have lacked the fizz of Pommery's offering.

When it came time to watch the big race, Johnston favoured the Pegasus deck over his own company's marquee.

Prime example

People involved with failed retirement village empire Prime Trust spent last week trotting into a Melbourne courtroom, called to a public examination to explain under oath what they knew of the company's affairs.

The Howard-era health minister Michael Wooldridge was up on Wednesday and his examination provided a reminder of how business was done in those long-lunching, hard-charging days before the global financial crisis came along and wrecked everyone's fun.

The court was read a July 2007 email written by Andrew Tyndale, a senior banker at Babcock & Brown - remember them? - when it was considering buying the right to manage 12 of Prime Trust's villages from chief executive Bill Lewski.

Lewski held the management rights through his private companies, having acquired them from Prime Trust for nix.

In the email, under the heading "Cost of management services", Tyndale described Prime Trust's agreement with Lewski as "non-traditional" and said "some concern has arisen about the cost of delivering the management services".

"How much of the management-fee income is net to us? We started out pricing this on a 10 times EBITA multiple.

"Then Bill [Lewski] squeezed a bit more to arrive at a $75 million purchase price with a holdback to give some assurance of achieving projections. "We were told that management was run by 'just three guys' with the implication that everything else was charged back to the villages in some form.

"The specified exceptions are costs of sales and marketing, which includes the three guys and 50 per cent of the insurance."

Nonetheless, Babcock went ahead with the deal. Those were the days.

Fighting back

Hemp knickers are again in a twist at the right-on funds manager Australian Ethical Investments, whose directors are in the gun under the contentious two-strikes rule.

About 40 per cent of shareholders voted against the company's remuneration report at the annual meeting last year, well in excess of the 25 per cent required to earn a strike - this despite AEI's claim it "has a long history of paying below-market salaries".

If more than 25 per cent reject the remuneration report this year, the meeting will automatically consider a motion to hold a second meeting spilling the board.

That will no doubt create a lot of extra paperwork for the fund, which is famous for disclosing its sustainability practices right down to the level of how many pieces of paper it uses (about 1.2 million last year).

Behind the campaign are dissident shareholders - led by founders Howard Pender, Caroline Le Couteur and James Thier - who are unhappy with the way the $600 million fund is being run and want to get rid of the managing director, Phillip Vernon, and the chairman, Andre Morony.

In addition to the threat of a spill, the dissidents have had motions to boot the pair placed on the agenda.

Needless to say, the incumbents object, using a notice of meeting sent out on Friday night to complain the crusade against them has so far cost the company at least $125,000.

They even suggest some of the statements made about them by the rebels might be defamatory.

"The directors are taking legal advice about the legal remedies available to them," the explanatory memorandum records.

If they do decide to sue, let's hope they choose a court that allows litigants to file their documents using both sides of the page.

Got a tip? bbutler@fairfaxmedia.com.au

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