Registrars To Slug It Out For Blue Chip Clients
Sydney Morning Herald
Wednesday July 18, 2001
The battle for the share registry business of Australia's biggest listed companies will intensify after Perpetual Trustee settled a long-running legal stoush with arch rival Computershare.
The terms of the settlement were not disclosed.
However, Computershare and Perpetual whose shares surged to a record $42.05 have agreed to a ``smooth transition" to end their historical business relationship at the end of this year.
Under a joint venture formed in March last year with the Stock Exchange, Perpetual is replacing ``bureau services" basic registry technology provided by Computershare with an ASX-developed system.
The ASX is yet to complete the untested technology, meaning none of Perpetual's major registry clients including millions of shareholders in NRMA, Telstra and Commonwealth Bank have been shifted to the new system, and time is running out.
The dispute, which had entered a formal mediation process, is largely a result of the historical structure of Australia's registry business, which was once dominated by accounting firms.
Computershare provided the technology and later bought the registry divisions of several of these firms, while Perpetual took over Coopers & Lybrand's registry division.
In April 2000, Computershare sued Perpetual and its registry subsidiary, alleging it had breached agreements by providing confidential information about its technology to an ASX executive. It later launched a claim for outstanding fees.
Perpetual cross-claimed in November, alleging Computershare was breaching the Trade Practices Act.
Perpetual's managing director, Mr Graham Bradley, said the ASX system was on track to be provided to clients later this year.
``I guess we are pleased the litigation has settled so we can move forward without the distraction," he said.
Perpetual shares hit a record high of $42.05 before closing 54c higher at $42.04, while Computershare fell 27c to $6.11.
A Computershare director, Mr Mark Elliott, said his company was happy to have certainty in terminating the agreement.
Mr Elliott said Computershare could replace the reputed $7 million to $10 million in annual fees Perpetual paid by snaring just one of Perpetual's top five clients.
``It's abnormal for us to provide the technology to our competitor," he said. ``It is historical, not our business plan. It's not something we would do anywhere else in the world.
``We would rather have the value-add registry income than bureau revenue.
``It's a bit like Australia sells iron ore to Japan and they sell cars back to us. We would much rather value add."
Computershare, which claims to represent more than half of the market, has AMP, Woolworths, Coles Myer, NAB, ANZ and Westpac as major clients.
``We have never ever tried to thwart the joint venture," Mr Elliott said. ``The good of the joint venture is that Perpetual gets their own technology designed by ASX and we get them off our back."
Computershare had ongoing concerns about the potential conflict of interest in the ASX's role as a market regulator.
``We are in full consultation with ASIC and the ACCC and they have been monitoring this and have been happy with the commercial discussions between the parties," Mr Elliott said.
``What's of ongoing concern is the ASX as a [joint venture] partner is wearing a couple of hats and we are not. We are only wearing one hat.
``They run the clearing. They run the settlement system and they are running a commercial initiative and that needs to be monitored. Nothing more, nothing less."
© 2001 Sydney Morning Herald