Tuesday, June 3, 2008

Australia really is another country: Part 2

I have previously written about the proposed takeover of St George bank by Westpac. I think Westpac is crazy – somewhat ameliorated by the fact that they are paying stock.

But there is one aspect of that takeover which makes you wonder what the board is could possibly be thinking. I know (and like) the Chairman (Ted Evans) and am very puzzled by this. [First disclosure: when Ted Evans was Secretary of the Australian Treasury I used to work for him.]

The thing that puzzles me most is the CEOs conflict of interest.

Gail Kelly- the superstar CEO of Westpac – was previously the CEO of St George Bank. Yes that is right. Only a few months ago.

On the plus side she probably knows more about the strength and weakness of St George than anyone. However you can say that about every deluded bank CEO of the last boom.

On the minus side she is financially conflicted. Gail Kelly – the CEO of Westpac – and who made an unprompted offer for St George – owns almost AUD40 million in St George shares. And it takes the online media to state the obvious: here.

Could this happen in America? Or is Australia really another country.

John

[Second disclosure: no interest in any stock mentioned.]

1 comment:

Walrus said...

Gail Kelly...When I went through my aussie real estate bubble eccentric mode about 3 months ago I spent a lot of time watching videos & reading articles about her.

I can't pin it down, but there is an air of hubris about her. Like she can control the financial market or something.

Obviously, I this is a hallow comment without anything backing it...but my scooby sense acts up when I read about her.

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