The CBA story recalls the Storm Financial problems and the sluggish way ASIC investigated those (the CBA, Macquarie and Bank of Queensland were some of the mainstream financial institutions involved in that debacle). It also recalls the way some company liquidators in the past have been able to plunder the assets of the companies they were administering for their own self-enrichment. The Stuart Ariff case comes to mind. While ASIC ‘got their man’ in this case, the regulator didn’t cover itself in glory according to commentators.
At Newcrest, the events of last week have been entangled in the value destruction caused by the Lihir takeover and what seems to be managerial problems at some of the company’s mines. Newcrest’s market value at the close on Friday of $9.4 billion was smaller than the $10 billion spent on the Lihir deal (in cash and shares), so it has been a significant loss for shareholders.
ASIC can’t restore that. But it can investigate the events of last week with alacrity and issue a statement to the market setting out what it has found and whether the market belief of advanced knowledge among some analysts and brokers is justified. Whether the market and investors believe ASIC is another thing.
This story was first published on our sister site, Crikey.
