Sunday, March 7, 2010

farmdoc's blog post number 686

It’s 13 days to the Tasmanian state election. And the Party’s are in a bidding frenzy to see who can throw the most money – taxpayers’ money, my money – at the logging industry. The ALP opened with A$6½M, only to be trumped by the Liberals’ A$7M. It mystifies me why loggers are a government-protected species. Other industries – e.g. clothing, textiles and footwear – have been decimated or killed outright courtesy of the policies of one government or other. But not the logging industry. Oh no. Logging industry leaders seem protected too. John Gay (pictured) is the chairman, and until recently the CEO too, of Gunns Limited – Tasmania’s and Australia’s biggest timber company. Last 8 December Gay sold 3.4M of his Gunns shares for A$3.1M. Then on 22 February Gunns reported a net profit after tax for the second half of 2009 of A$420,000 – a mere 3% of market estimates of A$12M+, and a 98¾% fall from the 2008 equivalent of A$33.6M. Its share price promptly free-fell by 35%. I don’t know if the profit/share price plummet caused Gay’s share sale – which was disclosed and attributed to a financial commitment he had to meet. On 24 February the Australian Stock Exchange asked Gunns when it first became aware of the 98¾% profit fall; but it didn’t ask when Gay first became aware of it. And it’s not investigating Gay’s sale at all let alone as insider trading. This was Gay’s first share sale in the company for 35 years. Ho hum.

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