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Mark Westfield at it again

  1. n_katounas

    13 Posts.

    Does anyone sense that this reporter has a vested interest in degrading and slandering ERG?
    His article is included below.

    NRMA buy not smart


    NRMA'S estimated loss of $37 million for the year just gone has been greatly exacerbated by the almost complete wipe-out of an investment in ticketing and smartcard maker ERG.

    The motoring group's chief executive Rob Carter purchased 10 million ERG shares early last year at between $2.05 and $2.30 a share, at about the same time that ERG chief executive Peter Fogarty sold a similar number of shares on market.
    The total investment of about $21 million is now worth $2.85 million at yesterday's closing price of 28.5c.

    NRMA's relationship with ERG had been developed by Sydney businessman Peter O'Connell, who was retained by Carter on a part-time consultancy of $3500 a day, or up to $38,500 a month, plus expenses. In July last year, those expenses totalled $16,000.

    It is understood that ERG paid a similar amount to O'Connell during the life of the consultancy, which matured on June 30.

    It is further understood that NRMA is shouldering the consultancy costs after this date.

    NRMA, ERG and O'Connell have been working to develop a smartcard, or Mobility Card as it is known under the project, for the motoring group's two million members to enable them to make financial transactions.

    The project has been given fresh impetus this week after ERG's rival for a $100 million smart card contract for the NSW train, ferry and bus services, Cubic Transportation, lost a damages action against the NSW Government.

    Cubic had alleged irregularities in the tendering process last year, but the court rejected its arguments.

    ERG is expected to formally be granted the contract soon.

    Its share price rose initially in reaction to the news, but has since slipped.

    ERG has suffered the departure of two of its finance directors, one of them just before the company was forced to restate income claimed from a German affiliate.

    It took nearly $200 million in write-downs in its first-half results. O'Connell has also been consulting NRMA and Carter on a proposal to develop a mobile telephone company along the lines of the failed telco, One.Tel.

    O'Connell is understood to have reasoned One.Tel failed because it was undercapitalised, this despite its two largest shareholders, Publishing & Broadcasting and News Limited (publisher of The Australian) invested nearly $1 billion in One.Tel.

    The mobile phone project would need $26 million in start-up capital and resale excess capacity from the Telstra, Optus and Vodafone networks.

    O'Connell said yesterday he had been retained by Carter, but the relationship was no longer in place, though it is understood the two men are negotiating a fresh contract.

    The Australian has sighted a draft contract, dated July 2002, between the NRMA and a company called Rogny Pty Ltd, understood to be associated with O'Connell.

    NRMA faces a tough period in the 12-week lead-up to a meeting called by supporters of two rival factions.

    Members will be asked to vote on the removal of the eight-member faction of former chairman Nick Whitlam and the removal of Richard Talbot's Motorists' Action Group faction.

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