NEW TEL EVENING COMICS->Deloitte chief's interesting conflicts
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ragingbull.lycos.com
ragingbull.lycos.com
Deloitte chief's interesting conflicts
By Geoff Elliott
16jan03
A GAS company and a telecommunications concern do not appear to have a lot in common, unless you are Domenic Martino.
Mr Martino is the chief executive of one of Australia's largest accounting groups, Deloitte Touche Tohmatsu.
He is also chairman of Sydney Gas and was a former director of New Tel, which slipped into liquidation this week.
But what is attracting the interest of badly burnt New Tel investors is how the same US promoters who tipped New Tel as a red hot buy have tipped Sydney Gas as a favourite, too.
The common link appears to be Mark Hake, a fund manager in Arizona, who sat on the board of New Tel with Mr Martino.
Mr Hake passed on information to internet website editor Vivian Lewis, of New York, who urged her subscribers, at the height of the dotcom boom, to buy New Tel shares.
And although she has offered advice on few other companies in Australia, she just happened to also tip the little-known Sydney Gas Company, chaired by Mr Martino.
Ms Lewis did so, quoting a report from financial services company Wiley Capital, saying the potential for Sydney Gas was "huge".
She said: "The report from Wiley was passed to me by Mark Hake, of Hake Capital Management."
Not surprisingly, Mr Martino also is a big believer in Sydney Gas's technology, which is designed to convert methane from coal beds into stable and consistent gas supplies.
For some years now, the company has said it is on the threshold of a leap in its business model.
The company's last annual general meeting was a slick sales pitch to investors to keep their faith in the company.
Mr Martino's association with Sydney Gas remains lucrative, earning Deloitte more than $457,000 in fees for the last financial year, up from $105,000 the year before.
This mirrors Mr Martino's ability to earn fees for his company while sitting on the New Tel board. Deloitte was paid more than $4 million in 2000 and 2001.
And Deloitte consulted on New Tel's disastrous China project.
Its Melbourne-based Deloitte consultant Jenny Wilson helped New Tel devise its strategy.
"I was not one of the partners on the job so I shouldn't comment," Ms Wilson said yesterday.
Mr Martino has previously denied any conflict of interest in maintaining directorships of publicly listed companies while being the chief executive of one of Australia's largest accounting and consultancy firms.
This is despite edicts from most global accounting groups forbidding their partners to sit on the boards of public companies |
