KEY POINTS:
The Serious Fraud Office's days are now numbered - at something less than 365 - but there are a few loose ends left to tie up, including the fallout from the Digi-Tech tax avoidance case.
Four of the defendants in the case, which is often held up as an example of how the SFO had lost its way in recent years, were back in court this week.
However, this time around it's in a bid to recover more of the costs they were awarded after the SFO's case was thrown out.
The Court of Appeal last year reduced the costs awarded to John Reid, Peter Russel, John Currie and Peter Connolly after they were acquitted on the SFO's Digi-Tech fraud and money-laundering charges.
Costs resulting from the original High Court hearing were expected to be between $500,000 and $1 million but the Court of Appeal slashed that to just $50,000 each for Currie and Connolly and zilch for Reid and Russel.
The decision drew fire from some commentators because two of three Court of Appeal judges who ruled on the matter said the costs should be reduced because they might leave the SFO short of cash to pursue other matters, "something that we do not regard as in the public interest".
The hearing began on Wednesday and winds up today.
ACCESS DENIED
Other unfinished SFO business includes former Access Brokerage managing director Peter Marshall's fraud charges. Proceedings in that case have been delayed again and again by Marshall's ill health.
Marshall has now applied for a stay which if granted would see him live out the rest of his days untroubled by the law.
The court will hear the application on November 5 and 6.
Marshall's trial promised to be an interesting one. In the witness statements which form part of theSFO's evidence, former Access employees said there were signs of a shortfall in investor funds for years before the discount stockbroker was wound up in late 2004 leaving clients $5 million out of pocket.
Access' owner, former NZ Olympic team boss Bill Garlick, has said he only became aware of the problems in September 2004, when he took over from the ailing Marshall.
If Marshall gets his stay, it appears unlikely the public will ever get to find out what exactly went wrong, and when.
WHO'S GONNA TAKE THE WAIT?
Last week's Stock Takes item on the 20 minute delay in accessing market announcements via NZX's website has struck a chord with readers, many of whom have emailed messages of support for our view. It also further fuelled discussions on the matter on market-focused internet chat sites.
However, NZX believes it is worth pointing out that the real time market information service it offers to retail investors for $25 a month is more than just announcements.
It also includes real time prices and market depth information. The ASX, which provides free real time announcements, charges $44 a month for the same information.
EXCELLENCE ADVENTURES
Software of Excellence shares were yesterday suspended pending the company's delisting after US company Henry Schein's successful full takeover.
The takeover sees SOE's former largest shareholder Co-Investor Capital Partners receive $350,000 from the company for its advisory work during the takeover.
The $2.90 a share Henry Schein eventually paid was at the top end of an independent valuation range but short of the $3 plus price former ABN Amro Craigs analyst Brett Orsler believed would be required to capture control of a company he said still had good growth prospects and a robust balance sheet.
While Orsler's put a DCF valuation of $2.76 on the company, he argued, quite reasonably, that shareholders should expect some premium for control above and beyond that.
However Orsler left ABN Amro Craigs shortly after that, and two other of the firm's analysts then produced a research note which gave a less upbeat view of SOE's value and therefore probably helped Henry Schein's offer gain traction.
Stock Takes has since confirmed that Orsler at the time owned SOE shares and mandatory convertible notes, a fact that was not disclosed in his May and June research notes.
While the amount of shares involved was not huge, about 20,000 ordinary shares and around 2000 mandatory convertible notes, a disclosure of interest was surely merited.
According to the NZX, its rules require participant firms to "declare when they may have an interest in a stock and make that information available when clients wish to enquire further".
Orsler's holding may or may not have influenced his research, but one thing is for sure - his stake and his failure to disclose it would have been very embarrassing for ABN Amro Craigs if those in favour of Henry Schein's offer had learned of it during the cut and thrust of the takeover. Software of Excellence last traded at $2.86.
SWEET DEALS
Goldman Sachs' Rodney Deacon has again produced some fascinating research on Sir Ron Brierley's Guinness Peat Group.
He believes the news flow out of Australia points towards GPG taking an active role in the consolidation of the sugar industry across the ditch.
GPG owns 27 per cent of Maryborough Sugar, which is bidding for Mulgrave Central Mill Co.
Deacon notes that should Maryborough succeed it would gain an enlarged stake in Sugar Terminals, a company in which GPG already has a 5 per cent stake.
Sugar Terminals is not pleased with this prospect and is seeking to alter its constitution in order to "stop inappropriate collaboration between large companies" on its register who might seek to "exert leverage" over the industry.
Deacon sees this as a reference to GPG, which also owns a 6 per cent $185 million stake in industry giant CSR.
Sugar Terminals: Stock Takes sympathises with your anxiety about the prospect of being pushed around by a large foreign-owned outfit.
Meanwhile, Deacon believes there's potential for GPG to bundle all of its sugar assets into a single vehicle, perhaps leading to "the realisation of cost savings and synergies, and ultimately lead to GPG crystallising value in some of its portfolio".
Deacon values Coats, which makes up 32 per cent of GPG's total assets, at $1.23 billion. GPG's next largest single investment is its 27 per cent stake in Tower Australia, valued at $231 million.
All up, Deacon assesses GPG's net asset value at $3.21 billion or $2.45 a share. Shares closed yesterday at $1.90.
CONTACT SPORT
Contact Energy's annual meeting on October 26 at Christchurch Town Hall promises some fireworks.
On the agenda is the re-election of independent director Tim Saunders.
The Shareholders Association will oppose it, saying Saunders has done little to earn the respect of the minority shareholders he is supposed to represent.
The association's Des Hunt says all three of Contact's independent directors "have lost the respect of the community".
"Those that have shares in Contact do not believe the three independent directors represent their interests. They've made three recommendations to sell the company, each time that's been a bad decision. Whatever they recommend in the future, no one's going to have any faith in them."
Brook Asset Management's Simon Botherway says Brook will also oppose Saunders.
But Botherway and Hunt concede the chances of getting Saunders off Contact's board are virtually nil.
With 51 per cent of the company, Origin effectively gets the final say on who represents minority shareholders.
Hunt also points out that among Contact's minorities are Australian institutions, some of whom also hold more meaningful stakes in Origin itself. They may vote in support of an Origin-friendly independent director, reasoning that's what's good for Origin is good for themselves.
Contact shares closed yesterday up 5c at $9.35.
