CBD

Senator comes out breathing fire

Senator comes out breathing fire

It's not every day a senator complains about the way you breathe, but that was the sad fate of ASIC deputy chairman Peter Kell on Tuesday night.

Kell was appearing in front of Senate estimates in the place of chairman Greg Medcraft, who was in St Petersburg for a meeting of the global peak body for securities regulators, IOSCO.

Extending a bipartisan hand, ALP stalwart Doug Cameron arced up after witnessing the National Party's John "Wacka" Williams lay into Kell over alleged wrongdoing by Commonwealth Bank financial planner Don Nguyen.

"You don't seem to take a breath when you're asked a question and it really is quite annoying, I must say," Cameron told Kell following one lengthy response. "You can answer these questions much quicker.

"I watched your responses to Senator Williams - please don't do that to me ... Don't take me on a waltz around the merry-go-round."

Siimon says

Business guru and former adman Siimon Reynolds has descended from the mount to deliver CBD some free advice. Remember, this is the man who on his website boasts that some of the world's largest corporations "have paid Siimon huge fees for his advice". Clearly that extra "i" is billable

Reynolds took exception to Wednesday's item on his chairmanship of soon-to-float telco wholesaler Inabox, describing it as "a really nasty piece".

Among other things, he accused CBD of doing damage to Inabox, "where the founders have slowly built up the company over 10 years, at great personal sacrifice, only to have you mock their efforts and endanger the float that they

rightly hope will be a highlight of their lives".

Chastened, CBD is now seriously considering ordering Reynolds' 10-hour DVD course on How to Build a Superb Business, a snip at just $895.

Tax slip woes

Who's the high-flying executive left in "a very difficult financial position" by a "huge" tax bill after failing to properly disclose their share options? A recent Administrative Appeals Tribunal ruling gives plenty of clues.

According to AAT senior member Bernard McCabe, in 2004 the unnamed taxpayer was "a senior officer in the Australian subsidiary of a large multinational company listed on the London Stock Exchange" - one of "a handful of executives who were eligible to participate in the parent company's employee incentive share scheme".

On March 4, 2004, he was granted options over 22,382 shares, exercisable at what is described as a "market value" of £7.349, plus 6715 free shares. The following year, on March 11, he got another 15,436 options, at £10.60, and 4631 free shares.

The options didn't vest for three years, and on July 3, 2007, he turned 25,005 options into shares, immediately selling half for a little over $500,000. Alarm bells only went off when he was preparing his 2007 tax return and realised he should have told the taxman about the options when they were issued.

The ATO refused his request for a do-over. It audited him, demanded he pay tax based on the current share price, and hit him with a 50 per cent penalty (later halved).

The company's share price fell in the second half of 2008, leaving him with "a largely paper gain that yielded an all-too-real tax bill and no means of satisfying the debt without liquidating other assets".

McCabe threw out the appeal. "A reasonable taxpayer - let alone one with this taxpayer's experience of dealing with financial and other matters - would not have taken such an insouciant approach to his tax affairs," he said.

Streak is over

All good things must come to an end and so has the Dow Jones index's run of 18 Tuesday rallies in a row, pointed out by Goldman Sachs' insto dealing boss, Richard Coppleson, on Monday. Instead, the index shed half a per cent.

Got a tip?

bbutler@fairfaxmedia.com.au

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