Court Battle: Nrma Ad Claims Stymied

Sydney Morning Herald

Wednesday September 15, 1999

By ANNE LAMPE

The NRMA board battle hotted up yesterday when president Mr Nicholas Whitlam and seven members of the pro-NRMA Insurance float faction, Members First, seeking election in the NRMA board ballot gave interim undertakings in the Supreme Court not to advertise that NRMA members can expect to receive shares in the insurance company if it floats and Members First remains in board control.

The undertaking was given pending next Tuesday's hearing of an application filed by dissident director Mr Ian Yates for an injunction on the share claims. It covers advertisements on Members First Internet site, press and radio advertisements and claims made in brochures distributed through NRMA Country Service Centres.

Last week the Australian Securities and Investment Commission expressed concern about the way Members First was linking the board poll to claims that a vote for Members First would mean members could expect to receive an average of $3,000 in shares, a figure contained in a valuation of NRMA Insurance by Macquarie Equities.

The basis of those claims is one of the areas foreshadowed to be explored in court, when evidence will be called from rival Motorist Action Group and anti-float directors Mr Richard Talbot and Mr Ian Yates.

Yesterday counsel for Mr Whitlam, Mr David Studdy, flagged that evidence would be called from Macquarie Equities, which recently issued a report valuing NRMA Insurance at $5 billion.

In another development, NRMA Ltd board candidate, actuary and MAG candidate Mr Peter Carroll has called for a special general meeting of NRMA Insurance members to be held to vote on a proposal to distribute an estimated $1 billion in accumulated surplus to members in the form of insurance rebates as loyalty rewards.

Mr Carroll has collected 130 member signatures outside NRMA's head office, 30 more than required, to call such a meeting under the company's articles of association. The motion is likely to be put to the insurance company's annual general meeting to be held on November 16.

Mr Carroll has written to the NRMA notifying his intention to seek to amend the articles of association so that directors provide a report specifying the amount of profit or surplus available for distribution as rebates or other benefits to members and any proposals to return surpluses in this manner.

NRMA paid rebates between 1992 and 1995, paying out more than $100 million in that time. Since 1995, Mr Carroll says, the accounts show NRMA accumulated about $1 billion in surpluses, an amount which equates to about $700 per insurance member, or 15 per cent of the premiums members have paid over the period.

© 1999 Sydney Morning Herald

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