Up To Their Necks In It

If the War on Iraq is not enough to give one the jitters, a new survey showing nearly half our companies are on the edge of insolvency should push you out of the comfort zone.

ASIC Probe Uncovers Insolvency

A pilot program surveying the solvency of 130 companies in Sydney and Melbourne has revealed that about half of the companies are close to going broke, including ten that are considering calling in the receivers. An Australian Securities and Investments Commission study targeted 130 companies, in which employees and creditors had complained about or were already subject to ASIC probes. It said yesterday that as a result of its inquiries, the directors of ten companies were considering "appointing voluntary administrators or liquidators". An ASIC spokeswoman added that at least another 50 companies were being monitored because of concern they were in trouble. Just 40 per cent were given a clean bill of health. (source: The Australian)

Qantas To Cut More Jobs

Qantas may not be in the above class, but it is set to cut more jobs as early as this week, blaming the twin troubles of the war in Iraq and the deadly SARS virus impact on the airline. Qantas is expected to escalate its cost-cutting program with more staff retrenchments in addition to earlier plans to reduce the equivalent of 2,500 full-time jobs through its forced leave program. The plan forces staff to take leave and other entitlements and was announced in two blocks - 1,500 in February and another 1,000 in March. Qantas chief executive Geoff Dixon has warned the airline would have to take more measures to protect its business if the international situation worsened. (Source: Financial Review)

Mobil Shuts Down Adelaide Refinery

Meanwhile, Mobil Oil Australia has blamed oversupply in the international refining market for its decision to shut down its Adelaide refinery, putting 400 employees out of work. Mobil refining and supply director Chris Erickson said yesterday the company had lost $208 million in 2001 and $99 million in 2000, with Adelaide responsible for "a great portion of those losses". The Port Stanvac refinery, 20km south of Adelaide, is the smallest such installation in Australia producing 78,000 barrels of refined fuel a day, about 9 per cent of total Australian capacity. South Australian Treasurer Kevin Foley said Mobil had "let down South Australians" and had "moral responsibility" to rehabilitate the site. (Source: The Australian)

Park Takes $2.5 Mill Golden Handshake

Another job cut, but this one has a happier ending .... Goodman Fielder chief executive Tom Park will collect a $2.5 million severance cheque on his way out the door as Burns Philp mops up the few remaining minority shareholders under its $1.9 billion bid for the food group. Park was only 18 months through a five-year contract when the axe fell. The redundancy payment comprises 18 months of ordinary pay plus a six-month notice period. The former lieutenant in the US Navy and a veteran of two tours of Vietnam has had trouble keeping a job. Before Goodman Fielder, Mr Park was barely five months through a five-year contract as chief executive of Southcorp when he stood aside in favour of the now deposed Keith Lambert. The change was one of many following the winemaker's $1.49 billion merger with Rosemount Estates. Park received severance payments on that occasion worth $3 million. Southcorp also paid him $3.8 million in compensation for share options he had to surrender in his former employer, Philip Morris. (Source: SMH)

Rich Has Access Win

Another celebrated former CEO, Jodee Rich has had his day in the NSW Supreme Court, working on his defence for the looming battle with the Australian Securities and Investments Commission. Rich won the right to access all the business records of One.Tel that ASIC has discovered in its $92 million civil case against him and other One.Tel directors. But he was also forced to cough up costs in the tens of thousands of dollars for James Packer's lawyers. ASIC has until May 1 to deliver the documents, which could include business records that both the liquidator to One.Tel, Ferrier Hodgson, and the Packer camp, among others, have in their possession and of which ASIC is aware. (Source: SMH)

APRA in Court Over Host-Plus

THE turmoil engulfing the $1.8 billion Host-Plus industry fund spilled into the courts yesterday as a key union launched legal action against both the superannuation regulator and the Australian Hotels Association. The Liquor Hospitality and Miscellaneous Workers Union, which has six representatives on the fund's board, claims the Australian Prudential Regulation Authority was unjustified in revoking the authority of Host-Plus to act as fund trustee. The union wants the authority - which has been suspended for 120 days - to be reinstated pending a negotiated solution to the Host-Plus board's problems. The union representatives favoured keeping Superpartners, owned by union-linked Industry Funds Services. (Source: The Australian)

ASX Rules Better Than Federal Law?

Finally, the head of the Australian Stock Exchange, Richard Humphry, has dismissed widespread criticism of the latest corporate governance guidelines, claiming they were "vastly superior" to the regulatory stance adopted by the US and UK. Humphry says corporate Australia should adhere to the guidelines or face more damaging "prescriptive" styles of corporate governance. He says the ASX is keen to avoid a US-style Sarbanes-Oxley legislative solution which is already seen by many in the US as damaging commercial activity and economic recovery." (Source: SMH)