July 21, 2011 / 9:46 PM / in 7 years

PRESS DIGEST-Australian Business News - July 22

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

A lawsuit against law firm Minter Ellison was launched in the Federal Court yesterday regarding advice offered by partner Lachlan Drew over the sale of a part of the Ray White real estate business in 2008 and 2009.  According to the claim, Mr Drew failed to warn Ray White that a divestment, which was acquired by the real estate group’s chief executive, Nicholas George, may have been subject to stamp duty.  Hunt & Hunt Lawyers has been recruited to represent Minter.  Page 40.

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Rural property investment group PrimeAg Australia yesterday received a strong level of support from investors for the institutional component of its controversial A$125 million raising.  Roger Corbett, chairman of PrimeAg, said “the response is a clear vote of confidence in PrimeAg’s strategy.”  However, shareholders are still dismayed the raising, with institutional investor Guinness Peat Group calling a meeting to replace the board.  Page 43.

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American bulk retailer Costco opened its first store in New South Wales yesterday.  The outlet in Auburn, which is nearly five times larger than a typical supermarket, secured 15,000 memberships before its launch.  Jim Sinegal, chief executive of Costco, said the Sydney store should be as successful as its outlet in Melbourne, which is estimated to earn A$200 million in sales for 2011.  “The consumer is always concerned about the economy but we’re all about value,” he said.  Page 43.

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Floyd Wilson, chief executive and founder of oil and gas explorer Petrohawk Energy , will receive a “retention bonus payment” worth millions of dollars if energy giant BHP Billiton’s A$14.1 billion takeover bid proceeds.  A document filed with the Securities and Exchange Commission in the United States reveals that should BHP acquire Petrohawk, Mr Wilson would remain as a consultant with the company for 60 days.  Page 43.

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THE AUSTRALIAN (www.theaustralian.news.com.au)

Telecommunications group Telstra yesterday announced that almost 300 jobs would be lost locally, with the roles taken over by workers at two Indian information technology companies.  The company said it would undertake talks with unions before proceeding with the job cuts.  Analysts say a major management reshuffle that takes effect at the company next month could prompt a further restructure of staffing levels.  Page 19

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THE SYDNEY MORNING HERALD (www.smh.com.au)

The Australian Competition and Consumer Commission has quizzed the joint venture partners of Experian Australia, which provides a listing of companies and consumers’ credit histories, eight separate times over the company’s corporate structure.  GE Capital, Westpac Banking Corporation, National Australia Bank, Commonwealth Bank of Australia, Citigroup, Australia and New Zealand Banking Group and British credit reporter Experian are all listed as shareholders.  Page B4.

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One of the executives tipped to replace Frank O‘Halloran as the chief executive of insurer QBE Insurance has quit the company.  Vince McLenaghan, according to a statement from QBE, resigned to pursue other unnamed ventures.  The departure was triggered by a restructure of the insurer’s operations into separate divisions for Australia and the Asia-Pacific.  Michael Goodwin will maintain his current role as the Asia-Pacific CEO, while Colin Fagen will lead the Australian division.  Page B1.

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Independent Federal MP Rob Oakeshott and the deputy leader of the Australian Greens, Christine Milne, yesterday called on the Australian Securities and Investments Commission to investigate a surge in BlueScope Steel and OneSteel shares days before a A$300 million assistance package was announced for the steel industry.  “I was surprised and frustrated about the amount of information that was leaked from the package in the final week.  It was an avalanche,” Senator Milne said.  Page B3.

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Chris Hamilton, head of the Australian Payments Clearing Association, yesterday was forced to clarify the purpose behind a review into the future of cheques following complaints from charities.  “No one is talking about closing anything, but if we discuss the problem now, we can make sure it is dealt with in a sensible, practical and convenient way,” Mr Hamilton said on the association’s website.  Page B3.

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THE AGE (www.theage.com.au)

Gold and copper producer Newcrest Mining yesterday forecast that the Gillard government’s proposed carbon tax would reduce the company’s profits by up to 3 percent, or just under A$30 million.  “For all sites we are experiencing, particularly in Australia, some pressure around labour, Australian dollars and higher commodity input prices,” Greg Robinson, chief executive of Newcrest, said.  Page B1.

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Major contractor Leighton Holdings could have its credit rating downgraded, with ratings agency Standard & Poor’s reassessing the company after Spanish construction group Grupo ACS acquired Leighton’s parent company Hochtief.  ACS’ net debt stands at A$11.6 billion, leading the ratings group to remark that Leighton’s new parent firm was possibly in an even more fragile position financially than Hochtief.  Page B3.

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The Federal Court in Perth yesterday banned Tim Johnston, founder of Firepower, a company preporting to specialise in vehicle emissions reduction technology, from managing a firm for two decades.  Firepower raised A$100 million from investors - including Austrade, former Defence chief Angus Houston and former Australian Football League star Wayne Carey - over its 16-year lifespan.  Page B3.

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The debt crisis enveloping the United States and Europe is unlikely to spread to Australia, the Organisation for Economic Co-operation and Development said yesterday.  “Australia has been lucky that we have been vertically integrated with the emerging markets . as long as growth is there in the emerging markets then what is happening in Europe won’t affect Australia,” Adrian Blundell-Wignall, deputy director of the organisation, said.  Page B4.

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