Saturday, December 14, 2013

Governor of Queensland?

There have been many reports recently, to the extent that it even seems now almost a consensus, that former Premier Rob Borbidge is to become the next Governor of Queensland.

I must say I find this astounding and there seems to be a complete lack of awareness of the Borbidge post-political record as a company director. Actually his post-political history seems to have been almost entirely airbrushed from Wikipedia?

The Borbidge corporate record was as Chairman at three ASX listed corporations: Asset Loan Co, Early Learning, and our own prominent FNQ collapsed developer CEC Group. Let me defer to Michael West at the Sydney Morning Herald on the Borbidge record with these: Politicians make lousy directors
What is it about politicians and company boards and a jinx? Is it that they are drawn to second-rate companies, or do they simply make second-rate directors?  
Former Queensland premier Rob Borbidge set the bar at a new level this week when a company he chairs, Asset Loan Co, lapsed into the loving embrace of voluntary administrators from Deloitte.  
He must be on a streak. As chairman also of foundering Cairns property group, CEC, Borbidge had presided over a record loss only 10 days before when it unveiled a 300% plunge in profits. Another basket case he chairs, Early Learning Services, has already conceded two profit downgrades since listing on the stock market less than a year ago.

Borbidge was associated at CEC and Early Learning with Cairns accounting identity Greg Kern who was also on the board of the Hedley pub disaster. However it is Asset Loan Co (ASQ) which is the most damning.
But let's get back to Rob Borbidge. Where this former premier of Queensland really  made a difference to the indifferent record of politicians-turned-directors was that he did not just front up to a few board meetings, pocket some fees and partake of the fine claret. 
No, Borbidge went further, actually spruiking Asset Loan's "investment'' products on commercial radio. Asset Loan has always been a two-bit bucketshop, a low-rent version of City Pacific, if you like. 
It advertised to get unsophisticated retail money into its funds, claiming its "bricks and mortar'' investments were good for mum and dad investors - then promptly on-lent that money for speculation in property development. 
Thanks to the odd press report, Borbidge had been reminded about the colourful activities of fellow directors Paul Hare and Russell Percival quite often - both of whom had been up on perjury charges in Queensland.

Given his background and extensive connections on the Gold Coast it is all but inconceivable that Borbidge was naïve as to what was in the ASQ cesspool. Yet when questioned the response was such as this: Unfair association with Fincorp
FORMER Queensland Nationals premier Rob Borbidge is the chairman of a high-risk, Gold Coast-based finance company offering huge 11 per cent returns to "mum and dad" investors.
The listed Asset Loan Co on-lends investor funds in the form of short-term loans that carry massive penalty rates, ballooning as high as 1000 per cent per annum.
Despite the high-risk nature of the group and the 11 per cent returns, Mr Borbidge - premier from 1996 to 1998 - said it was not right to equate Asset Loan Co with failed investment groups such as Fincorp, Westpoint and Australian Capital Reserve.
"It's not at all fair to be associating Asset Loan Co with Fincorp. It's a very hands-on company," he said. "(It) has always operated profitably and it is operating at higher profit levels than ever before."

That was in July 2007, a mere 13 months before ASQ collapsed and indeed joined Fincorp et al. The collapse took with it the "mum and dad" investors who had invested on the basis of Borbidge's reputation and advertisements for ASQ.

Borbidge has also recently been a key lobbyist for the Aquis Casino proposal in Cairns. The issue of lobbyist influence has been raised previously as an issue in Queensland politics. A former politician being catapulted from casino lobbyist to the Guvnor's residence should be an issue of question regardless of any opinion on the project itself.

This is simply not an appropriate person as Governor of Queensland in my view and an embarrassment that it is even being contemplated.

Further links:

Asset Loan Co: One underdog not to back

Watchdog eyes ex-premier's Asset Loans

Farewell to a loss leader

Former premier to bale out of investment ads

Borbidge colleague's US scandal

Asset Loan collapse exposes system flaws

ASIC caught waving horses through gate

Class action probe on Asset Loans

A beaming Borbidge


The ASX disclosures of Asset Loans Co (ASQ): 2008; 2007; 2006; 2005; 2004.

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