Frequent flyers have been totally shafted by the Ansett administrators and their bed-fellows from the union movement, but they still approved the Tesna sale at last week’s creditors meeting after the unions played the PR game smartly.

Firstly, the whole thing was a PR stunt and captured by the unions who have done their level best to shaft all the other creditors, most notably the frequent flyers, who were too polite to point out the sweetheart union treatment.

Unionists got there early and grabbed all the key seats near the stage and, more importantly, near the two microphones down the front. ACTU secretary Greg Combet, Prime Ministerial wannabe Bill Shorten (AWU) and Smithy from the ASU all lined up early to give their rhetorical support to the teetering Tesna deal with those bottom fishers Lindsay Fox and Solly Lew.

The cricket was taken off the big screen as the administrators walked in, which was the cue for all the unionists to collectively do an “Ansett, Ansett, Ansett, oi,oi,oi” chant, which clearly established their noise, if not numerical, supremacy amongst the different classes of creditor.

The frequent flyers were all ushered to the upper decks to the right of the stage whilst the employees dominated the seats actually on the arena.

If you wanted to criticise all these sweetheart union deals you had climb down from the stands actually walk onto the tennis court only to get heckled by the unionists who are getting 100 cents in the dollar for their entitlements which are worth about $700 million.

Because they claimed to be the largest creditor, the workers, represented by the ACTU, were able to sack the previous administrators Price Waterhouse Coopers and get the union-friendly Marks from Arthur Andersen, that esteemed firm which has been shredding Enron documents, was the HIH auditor who signed accounts in October 2000 saying the insurer had net assets of almost $1 billion and is also getting sued over the Bond Corp audit.

PWC were way too close to the Air New Zealand board and were clearly following their agenda in stopping Ansett from flying.

But non-employee creditors look like they could end up getting far less back than if the planes had remained grounded and this is where Arthur Andersen has been taking their riding instructions from the unions.

The unions clearly have the numbers on the 32-person creditors committee because Diners Club CEO Bryan Ericson has only just been invited to join on behalf of millions of frequent flyer members. I’m still waiting to be provided with a complete list of the creditors committee.

Ericson spoke well on behalf of frequent flyers as did about a dozen other speakers over the course of the surprisingly brief 130-minute meeting.

The central thrust from the frequent flyers was that we were being asked to approve an uncertain deal without even knowing how much we would be back from the administrators, or even knowing what future offer to point holders that Lew and Fox would make.

As we all now know, the 70 billion frequent flyer points were only on the Ansett books at $140 million when the retail value was really about $800 million. The points holders should have been calling the shots along with the unions but did not get themselves organised quickly enough.

Afterall, frequent flyer creditors weren’t even invited to the first creditors meeting at Crown casino when the new hand-picked administrators were appointed.

As a result, the workers are getting 100 cents in the dollar and, in some cases, large redundancy payouts for people already in new jobs. Contrast that with someone who had spent $20,000 accruing 100,000 points and will get probably get a payout of about $5 from the administrator over the next 3 years.

Assurances from the administrators that Lindsay Fox was promising to make points holder “very very happy” was cold comfort when so much uncertainty now surrounds the Tesna bid after the January 31 sale deadline was missed.

The Marks really did shock the meeting in announcing the delayed sale for a maximum of 30 days. With the business losing $6 million a week and February a traditionally bad month, is it any surprise that Fox and Lew are delaying?

The blame for the delay is being sheeted home to the government-owned Sydney Airports Corporation which is very ironic given that Fox and Lew jumped so brazenly into bed with Labor shortly before the election.

The Howard government would well remember that Fox and Lew invited Simon Crean, Steve Bracks and John Brumby to the sale announcement on November 8 – just two days before the federal election.

So why is it that all of the privatised airports have assigned their leases to Tesna but the Howard controlled Sydney Airport is playing funny buggers demanding business plans and all sorts of other assurances.

Adam Shand’s piece in the Fin Review on January 30 had this to say about the colourful assortment of creditors who took to the microphone.

“A former Linfox employee, Ron Wood, who had taken early retirement, warned that Fox was not to be trusted and “when he does a deal he comes out on top”. Mentha thanked him for his question and wished him well for his retirement.

Then, from the back, a dapper gent named Brian Bested piped up, saying the administrators had ignored a $5 billion offer he and some other unnamed associates had pitched, which would have returned 30c in the dollar.

Apparently, this had as much credence as the Russian petrochemical tsar, now resident in South Africa, who had offered to pay for Ansett in jet fuel.

Even shareholder activist Stephen Mayne popped up with some curly questions. With no directors to unseat, one suspects that perhaps Mayne was just peeved that he was stranded in Port Augusta when Ansett collapsed.”

ends

Truth be known, as a creditor living about 500 metres from the meeting venue, how could any shareholder activist not fly the flag at what was billed as “the world’s biggest creditors meeting”.

I asked about the $10 million in fees going to Arthur Andersen and a subsequent frequent flyer asked why the resolution to approve the latest round of fees had been dropped from the agenda.

The Marks said this was just to save time and the fees had been approved by the creditors committee (and who has got the numbers on that?).

Leon Swier (sic) from legal firm Arnold Block Leibler, the man who masterminded Peter Scanlon and John Elliott’s defence of those famous $65 million theft and conspiracy charges, was up on the stage with the two Marks and I also asked him to clarify an earlier answer when he’d failed to say how much in unfunded superannuation was being sought in a claim to the Federal Court.

The answer of $85 million was actually in the creditors report but since we’d only been able to pick up a copy of it at the meeting, very few creditors had actually read the report to creditors before they voted to approve the Tesna sale.

There was a real sense of Yannon old boys week at the meeting. To start with, Coles Myer is virtually the only company that chooses to hold its annual meetings at Melbourne Park where the Australian Open is played.

The key financial beneficiary of Yannon, Solomon Lew, is one of the key players in the Ansett saga and his chief ally during Yannon was Arnold Block Leibler principal and Coles Myer director Mark Leibler, whose firm is working with the administrators as part of the 150 lawyers working on the deal and racking up estimated costs of $55 million that the creditors are paying for.

You may remember that the Solly-stacked Coles Myer board commissioned then QC Alan Goldberg to do a review of the Yannon transaction and this whitewash of a report is now considered somewhat of a laughing stock.

Alan Goldberg QC is now judge Goldberg of the Federal Court and he has been making a number of judgements on the Ansett administration so far.

No one sledged Solly Lew’s record at the meeting and as someone only owed about 24,000 points or about $100, I wasn’t about to monopolise the microphone.

However, I did ask the question about the cost of keeping Ansett in the sky which the Marks failed to answer.

If Fox and Lew do get cold feet and pull out as the market is increasingly suspecting, this could go down as another Arthur Andersen special and the legal suits might really start flying if that happens.