LABOR’S Shadow Assistant Treasurer Andrew Leigh has hit back at claims he is economically misinformed, saying his recently panned opinion piece was “not aiming to be the final word on overlapping ownership”.
Mr Leigh sparked a wave of criticism when he wrote a piece for the Sydney Morning Herald on Monday, arguing that five “faceless investors” — HSBC, JP Morgan, National Nominees, Citicorp and BNP Paribas — own a “massive chunk of our listed companies”.
Readers derided it as “embarrassing” and demonstrating an “abysmal lack of knowledge” for failing to differentiate between ownership and being a trustee. …
In the article, Mr Leigh, who has a PhD in economics from the Australian National University, likened the “faceless five” to sinister mega-corporations from science fiction, like Lex Luthor’s Lexcorp, Cyberdyne Systems from the Terminator franchise, or Weyland-Yutani in Aliens.
“If you look at the big players in our 20 largest industries, the five faceless investors have a majority stake in most of them,” Mr Leigh wrote. “They dominate industries as diverse as airlines, insurance, telecommunications and mining.
“Let’s take investor HSBC, for example. In petrol retailing, it owns one-third of Caltex and one-fifth of Woolworths. In electricity, it owns one-fifth of Origin and one-fifth of AGL. In life insurance, it owns a quarter of AMP and one-fifth of ANZ. In department stores and supermarkets, it owns one-fifth of Myer, David Jones, Wesfarmers and Woolworths. …
ABC Bullion chief economist Jordan Eliseo tweeted: “Interesting read Andrew — though isn’t part of this just custodians for large super funds with millions of retail customers?”
James Chessell, Europe correspondent with Fairfax stablemate The Australian Financial Review, chimed in: “Are you sure you aren’t confusing custodians with actual shareholders? HSBC doesn’t own 1/3 of Caltex.”
Fund manager and AFR columnist Christopher Joye added: “Andrew your research is totally wrong: the 5 firms are all custodians acting as trustees for other investors.”
Mike King, investment analyst with The Motley Fool, tweeted: “Maybe it’s time Fairfax pulled this article down given the underlying argument is completely wrong?”
Con Michalakis, chief investment officer at Statewide Super, wrote: “Seriously you do know what a custodian is — right?”
Wow this is an epic fail. It’s one thing to get this wrong in the heat of the moment, but to write an op ed that makes hysterical claims that merely expose his economic illiteracy is a special kind of stupid.