Rich-listers’ court stoush throws cloud over pharmacy partnership
Rich-listers Cathie Reid and Stuart Giles were obviously very excited to blast out news of their “game changer” partnership with Chemist Warehouse last year, a deal that would have seen them operating a heap of pharmacies inside hospitals across Australia and maybe even overseas.
As Reid told the Australian Financial Review in August, the joint venture “has the potential to be the biggest thing we have done yet”. And, yes, while Reid is known to make grand pronouncements (just take a look at her Instagram feed), even the Chemist Warehouse folk were happy to confirm the news.
Few would argue that the deal stood to mint them all another fortune, but there was so much more at stake here than just money. Cosying up to CW co-founders Jack Gance and Mario Verrocchi would have certainly helped Reid and Giles with some reputational tissue repair they so badly need at the moment. Both remain entangled in a nasty legal dispute with Icon Group, the company they co-founded in 2012 and sold off to private equity, and so a big old hug and healthy partnership with two renowned Australian billionaires could hardly hurt the old brand.
As recently as Tuesday, Reid told Margin Call of wanting to “sensibly resolve” the bitterness with Icon, the pending legal case being up for a directions hearing in March. Low likelihood of that, of course, especially when everyone’s still seething and sabre-rattling at each other in the press, including here, in this very column, as we’ve been writing this week.
But the far bigger problem for Reid and Giles is that the deal with Gance and Verrocchi is riding very hard on the outcome of that legal battle, and Margin Call hears the partnership has been effectively frozen in carbonite until the matter is resolved. So there is no partnership. At best it’s on hold; at worst it’s off the table entirely.
We suspect the CW chaps are leaning into the latter, because what’s clear is that they’re most unhappy about the Icon mess and have basically gone cold and made it clear to Reid and Giles that there’s no discussion until their lawsuits are put to bed.
And not just resolved, either; they’ll basically have to emerge reputationally intact for the partnership to proceed.
As to why Gance and Verrocchi even toyed with the idea in the first place, while the particulars of the legal fight were being ventilated in the press, available for anyone to read online, is anyone’s guess. Googling someone is really the lowest form of due diligence.
A spokeswoman for Chemist Warehouse declined to comment on the status of talks with Reid and Giles, and Reid didn’t respond to questions.
Mudbath
Alarming reports of a devastating mudslide that engulfed parts of SSR Mining’s Copler gold operations in Turkey overnight, a tragedy that appears to have left nine workers missing and set off an enormous rescue mission.
Global media have covered the disaster near the town of Ilic, in Turkey’s Erzincan province, noting that 400 search and recovery personnel descended on the site fearing for the workers, but also to address a possible environmental catastrophe.
It’s all anyone’s talking about in the world of mining, and yet a strangely muted response from company management. Scheduled to hold an investor presentation on Wednesday, the bosses would have been forgiven for cancelling the call on account of the calamity.
But, no, they pressed ahead, committed as they are to talking up their long-term and very bullish outlook for the company, which they did, oddly, quickly addressing the disaster abroad and then moving fast onto the exciting percentages of mine-life production and corporate net asset values.
The incident only resurfaced once the floor was opened to analyst questions, the first coming from Ovais Habib at Scotiabank, who tried to raise the matter at Copler only to prompt an immediate shutdown of the remaining Q&A, almost like SSR President Rodney Antal finally realised there was something deathly wrong with the optics of holding the conference call in the first place.
“I don’t have a lot more details to provide anyone in the market,” Antal said. “And in fact, I think given the situation is still dynamic, we’re probably going – we’re going to cut this conference call short now for questions. I think our priority right now should be supporting the team on site.”
Ya think?
Loose lips sink ships
The Federal Court has thrown a spotlight on Lisa Wilkinson’s controversial 2022 Logies speech this week and apparently drawn attention to another more recent address, delivered by two of Wilkinson’s journalistic peers, Neil Chenoweth and Edmund Tadros of Nine Entertainment’s Financial Review.
Both were presented several Walkley Awards, including the gold, in November for their reporting on the PwC tax scandal, accepting the gongs with a 12-minute spiel still viewable online. Taking to the microphone first, Chenoweth acknowledged the public servants and officials in the tax office and the Tax Practitioners Board “who for years did nothing more than doing their jobs, who put their careers on the line and have probably blighted their careers because no good deed goes unpunished in bringing this stuff to light.”
That comment, Margin Call understands, didn’t go unnoticed by the beady-eyed lawyers enmeshed in the PwC debacle. They’re wondering what, if anything, Chenoweth’s comment might reveal about the identity of his sources – and also wondering if the TPB may have been one of them because, if true, it could conceivably taint the investigation the TPB ran into a central player in this mess: the former PwC tax partner Peter Collins.
It’s all a big if, but if the logic follows then there may be bigger questions for the TPB over apprehensions of bias and the bending and breaking of laws governing how investigations are supposed to be run. Again, all theoretical at this point.
Chenoweth rejected the suggestion entirely. “I’ve been at the Financial Review for 30 years now writing about scandals, collapses and corporate misbehaviour, and what I said at the Walkleys could apply to almost any of these stories,” he said. “That no good deed goes unpunished is just a truism. I’ll confess to making a lame speech. But to suggest it represented some sort of statement about the Financial Review’s relationship with the Tax Practitioners Board is just absurd.”
Seems as though some folks at the TPB, led by CEO secretary Michael O’Neill and chaired by Peter de Cure, are sweating bullets that a complaint may lob.
Who knew that for the likes of Wilkinson and Chenoweth, the act of saying thank you could prove so fraught.
Medical skirmish gets pulses racing
Most lawyers will tell you their work doesn’t save lives, but a case starting on Monday could prove the exception.
‘The scapegoating of business has to stop’: literal alarm at corporate Oscars
Seats were in short supply at business’s equivalent of the Oscars, but the speeches didn’t miss and at least one big name couldn’t wait to hot-foot it out of there before the dessert plates were even cleared.