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Date Posted: 23:30:58 02/24/03 Mon
Author: February 25 2003
Subject: Packers silence the CPHIC dissenters

Packers silence the CPHIC dissenters
By Anthony Hughes
February 25 2003

James Packer yesterday ... defended Cuffe appointment. Photo: Kate Geraghty

The Packers yesterday doused a rare public confrontation when shareholders voted down a plan to wind up the family-controlled CPH Investment Corp, allowing the group to forge ahead with its merger with financial services group Challenger International.

Brothers Chris and Tim Mann, who had led the requisitioning of the meeting of CPHIC investors, found some support for their calls for CPHIC to also disclose more information to shareholders. All seven resolutions put up by the brothers were soundly defeated.

James Packer, who chaired the meeting, said he would "take it on board to give as much information that is practical and appropriate to shareholders".

Mr Packer also defended the recent appointment of Commonwealth Bank's $33 million man, Chris Cuffe, as chief executive of CPH.

"I think we have in Mr Cuffe a pre-eminent, if not the pre-eminent executive in that field [of superannuation] in Australia," Mr Packer said.

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Mr Cuffe, he said, would effectively be paid by Consolidated Press, 100 per cent owner of CPH Management, which in turn manages the trust and earns management and performance-based fees. Therefore unitholders would not be bearing any extra costs in relation to Mr Cuffe's employment.

CPHIC units fell 2c to 53c, having rallied in recent weeks, but are still below the 2000 issue price of 60c.

CPHIC confirmed yesterday that former Colonial executive Peter Polson would be joining the CPH board, adding to the Commonwealth Bank defections.

Mr Packer said: "The Challenger business is business that needs capital, not cash, and CPHIC is a business that has cash and we have been looking for a business."

Mr Packer was taken to task by the Australian Shareholders Association for revealing he would vote undirected proxies against the motion before there had been any debate on the floor of the meeting and the possibility that Challenger shareholders would be denied an annual meeting under the new structure.

The Manns were also criticised by one major shareholder, lawyer Chris Murphy, particularly a resolution calling for an apology from CPH about the poor unit price performance.

Mr Murphy said it was his understanding that the meeting cost unitholders $200,000 to hold. He lauded the performance of CPHIC in holding rather than spending the $400 million in cash it got from exiting its John Fairfax holding in 2001.

Chris Mann said requisitioning the meeting had a "significant part to play" in restoring the CPHIC unit price.

CPHIC units have also been spurred by buying from the Lowy family interests, which confirmed last week that they had become a substantial shareholder with about 5 per cent of the group.

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