Business awards for 2009

Mike Field/Fairfax

OBSESSION: It turned out that Wall Street swindler Bernard Madoff was obsessed with an animal. The bull to be precise.

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It has been quite a year in the world of business and finance beginning with warnings of Armageddon yet ending with optimism re-emerging. Along the way there have been some entertaining and memorable moments, some of which are captured in the awards below.

 Confession of the year: Satyam chairman B. Ramalinga Raju.

Raju got the year off to a flying start, resigning in early January in a scandal that was quickly dubbed India's Enron. The head of Indian outsourcing company Satyam Computer Services, Raju quit, confessing profits had been falsely inflated for years sending his company's shares tumbling almost 80 percent. Even better, his confessional letter was posted on the internet for all to see.

Obsession of the year: Bernard Madoff's infatuation with bulls.

This was uncovered by investigators searching Wall Street swindler Madoff's properties. Madoff, remember, is now serving 150 years in jail for bilking investors out of about US$65 billion through a ponzi scheme. Madoff's luxury Palm Beach house was full of objects and images depicting bulls, the renowned symbol of a confident sharemarket. His two boats seized by federal agents were even named "Bull" and "Little Bull."

Vigilante justice of the year:  I'm unable to separate two strong contenders, - the German Zimmer frame gang and the patrons who roughed up Rod Petricevic, the boss of failed finance company Bridgecorp, in an Auckland bar and restaurant.

The German Zimmer frame gang, unsurprisingly consisting of a group of pensioners, was accused of kidnapping and torturing a financial adviser who lost about $4 million of their savings. Their actions apparently included hitting the man with a Zimmer frame, bounding him with duct tape, bundling him into a car boot and driving him 300 miles where the hapless adviser was allegedly imprisoned in an unheated cellar.

As reported by The Sunday Star-Times, Petricevic was set upon physically and verbally by fellow punters at St Heliers' Moreton's Bar and Restaurant with one man telling him: ""F--- off, you're not wanted here."

Punch-up of the year: Karl Simich, managing director of Australia's Sandfire Resources, takes on his chairman Miles Kennedy.

According to The Australian Financial Review, the two men came to blows over lunch in an Italian restaurant in Perth this month. The argument apparently started over what price they should sell Sandfire for if the board received a takeover offer. The fight apparently left Simich bloodied but it is Kennedy who is leaving, albeit probably with a A$500,000 golden handshake the Australian Shareholders Association has labelled outrageous.

Biggest Mickey take by a listed company: Orion Minerals Group's New Year's Eve annual meeting.

Would-be Chilean iron ore miner OMG, which listed on the sharemarket via a reverse takeover of RLV No 3 late last year, is holding its annual meeting in Auckland on New Year's Eve. Yes, New Year's Eve. However, given there had only been 28 trades in OMG's shares in 2009 at the time of writing, it's unlikely there would've been a deluge of shareholder attendees even if the meeting was on a more suitable date.

Business theme of the year:  Companies embracing the new debt fearing world by recapitalising.

As legendary US investor Warren Buffett put it: "It's only when the tide goes out that you learn who's been swimming naked." And plenty of companies were left floundering in the shallows minus their togs this year.

In the 11 months to November, $3.17 billion of equity was raised via the sharemarket with another $3.02 billion in corporate debt raised. The equity included money stumped up for the resurrections of Nuplex, Fisher & Paykel Appliances, PGG Wrightson and Pyne Gould Corporation. There were also the likes of Fletcher Building, SkyCity Entertainment Group, Freightways and Kiwi Income Property Trust raising equity to pare back debt levels.

Away from the sharemarket there was the $70 million recapitalisation of TV3's parent MediaWorks. Owner Ironbridge Capital's debt fuelled 2007 takeover left MediaWorks with $530 million of debt on its books and an annual interest bill of $92.8 million. Throw in a massive downturn in the advertising market, the source of MediaWorks' revenue, and cash was badly needed.

And let's not forget the up to $70 million provided to Ports of Auckland by the region's ratepayers via Auckland Regional Council offshoot and port parent Auckland Regional Holdings.

Tour guide of the year: Shareholders Association chairman Bruce Sheppard.

TV3's Campbell Live takes Sheppard to Hanover Finance co-owner Mark Hotchin's Paratai Drive mansion. What followed was great TV, albeit unappreciated by Hanover's legal team.

Most bizarre and dilutionary deal of the year: Allied Farmers taking over failed finance company Hanover's loan book.

Allied Farmers issues 1.9 billion shares to the Hanover group's 16,400 investors handing them 98 percent of Allied Farmers. And what does Allied Farmers get? A loan book, consisting of many second mortgages, on bombed out property ventures such as Jack's Point, Five Mile, and Kawerau Falls.  Go figure.

Quote of the year: Okay, so this one's front of mind because it was said recently. But this beauty from Guinness Peat Group's New Zealand director Tony Gibbs on the Allied Farmers-Hanover Finance deal is hard to top:

"It looks like taking a pile of custard from one plate and putting it on another."

An honourable mention must also go to Satyam's Raju for the final sentence of his confessional letter: "I am now prepared to subject myself to the laws of the land and face consequences thereof."

Amen.

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