Solomon Lew
Encyclopedia
Solomon Lew is an Australian businessman, and one of Australia's richest men. His principal commercial activities involve importing apparel, toys and other goods into Australia from China and share market investments, principally in retail companies.
He was formerly a director then Chairman of the board for Coles Myer (now known as the Coles Group) until voted out by shareholders after a series of controversies related to his private dealings with the company. He was also involved in an unsuccessful attempt to resurrect Ansett airlines with Lindsay Fox
following its collapse in September 2001. In 2008 he returned to the board of his public company vehicle Premier Investments and became its chairman.
The Australian Broadcasting Corporation's
PM programme described the transaction:
"The Yannon deal was an undisclosed indemnity given by Coles-Myer to a shelf company called Yannon set up by CS First Boston. It bought shares in a company called Premier, a major shareholder in Coles-Myer controlled by then Executive Chair of Coles, Solomon Lew. It guaranteed Yannon against any losses in the share deal, eventually costing Coles $18 million. Coles retrieved $12 million in a later agreement between itself, Mr Lew and with other parties.
The funding of the buying of its own shares, the apparent involvement of the Chairman and the lack of disclosure raised serious governance issues for Coles-Myer, and ended with the replacement of almost the entire Board of Directors and the withdrawal of significant shareholder support."
When Coles Myer's Chief Financial Officer, Phillip Bowman resigned and revealed the details of the transaction it brought a great deal of unwanted public attention to Lew. Bowman's revelations prompted an investigation into whether the Yannon transaction broke the Corporations Law or other laws that lasted five years and gathered a quarter of a million pages of documents and twelve thousand pages of evidence.
The Australian Securities and Investment Commission (ASIC) recommended criminal prosecution against Lew in its brief, although the Commonwealth Director of Public Prosecutions, who has the final decision, decided not to proceed with criminal charges against Lew, Lew's advisers or those working within Coles Myer. The Chairman of ASIC told the ABC:
"I think where the community would have had concern is if the community had felt that a transaction was beyond investigation in some way. This transaction was not beyond investigation."
Lew offered competing explanations for what happened next. But the end result was that the Coles Myer shares were assigned to Premier Investments for an $8 million profit.
A Queen's Counsel who investigated the transaction said:
Well, he very simply bought them for $8.20. There was no substantial movement of the share price, but he sold them to Premier for $9.00. He made 80 cents a share, or $8 million, in four weeks. http://www.abc.net.au/rn/talks/bbing/stories/s10786.htm
formed a consortium to acquire Ansett Airlines after it had an Administrator appointed. They sought and obtained the exclusive right to negotiate to purchase the airline.
They obtained the agreement of various stakeholders in the airline, including trade union members and their representatives. The secretary of the Australian Council of Trade Unions
ACTU Greg Combet said Lew had breached 'repeated commitments'http://parlinfoweb.aph.gov.au/piweb/repository1/media/npaper_1/8p0660.pdf.
During this time spent negotiating, the administrators had been persuaded to continue to operate the airline despite heavy losses which reduced the amount ultimately available to creditors, which included employees owed entitlements.
Lew and Fox had committed to take on $183 million of these entitlement obligations if they acquired the company. These commitments and their statements that they could and would proceed with the acquisition led the trade unions with members involved in the business to support the bid.
The consequence of Lew's withdrawal was much embarrassment for the ACTU, which had strongly supported the Lew-Fox bid. Lew's withdrawal also cost 2800 people their jobs http://www.abc.net.au/7.30/content/2002/s492463.htm.
Prior to the vote, Lew campaigned heavily spending an estimated $10 million campaigning for his re-election focusing mainly on smaller shareholders. He was successful in obtaining millions of proxies but they were ultimately insufficient.
Analysts criticised the offer for being too low and comprising less than half in cash.
In publicly explaining his offer, Lew said Just Group was trading worse than had been disclosed to the investment community. Just Group's Dr Pollard disputed this claim and threatened to report Lew for breaching the Corporations Law and rules relating to takeovers for making claims of this kind outside the formal documentation associated with his bid http://www.theaustralian.news.com.au/story/0,25197,23599589-20501,00.html.
Media commentators were strongly critical of Lew's tactics http://www.theaustralian.news.com.au/story/0,25197,23589090-30538,00.htmlhttp://www.theaustralian.news.com.au/story/0,25197,23599518-5001641,00.html, with one describing him as "stunningly gauche".
, Stevie and Jaki are active in the Lews' business empire.
He was formerly a director then Chairman of the board for Coles Myer (now known as the Coles Group) until voted out by shareholders after a series of controversies related to his private dealings with the company. He was also involved in an unsuccessful attempt to resurrect Ansett airlines with Lindsay Fox
Lindsay Fox
Lindsay Edward Fox AC is an Australian businessman. As of 2009, he was the 10th richest person in Australia, with a net worth of around 1.5 billion . He is best known as the founder and chairman of his family-owned trucking and logistics company, Linfox.- Early life :Lindsay Fox was brought up in...
following its collapse in September 2001. In 2008 he returned to the board of his public company vehicle Premier Investments and became its chairman.
Yannon transaction
While Chairman of Coles Myer, Solomon Lew involved the company in a deal with a private company Yannon Pty Ltd which ultimately lost Coles $18 million. The money was used to help fund a company of Lew's called Premier Investments which in turn owned shares in Coles Myer. The money was used to helped meet Lew's debt servicing obligations to banks, which were high due to his high level of indebtedness and high interest rates at the time http://www.loansense.com.au/historical-rates.html.The Australian Broadcasting Corporation's
Australian Broadcasting Corporation
The Australian Broadcasting Corporation, commonly referred to as "the ABC" , is Australia's national public broadcaster...
PM programme described the transaction:
"The Yannon deal was an undisclosed indemnity given by Coles-Myer to a shelf company called Yannon set up by CS First Boston. It bought shares in a company called Premier, a major shareholder in Coles-Myer controlled by then Executive Chair of Coles, Solomon Lew. It guaranteed Yannon against any losses in the share deal, eventually costing Coles $18 million. Coles retrieved $12 million in a later agreement between itself, Mr Lew and with other parties.
The funding of the buying of its own shares, the apparent involvement of the Chairman and the lack of disclosure raised serious governance issues for Coles-Myer, and ended with the replacement of almost the entire Board of Directors and the withdrawal of significant shareholder support."
When Coles Myer's Chief Financial Officer, Phillip Bowman resigned and revealed the details of the transaction it brought a great deal of unwanted public attention to Lew. Bowman's revelations prompted an investigation into whether the Yannon transaction broke the Corporations Law or other laws that lasted five years and gathered a quarter of a million pages of documents and twelve thousand pages of evidence.
The Australian Securities and Investment Commission (ASIC) recommended criminal prosecution against Lew in its brief, although the Commonwealth Director of Public Prosecutions, who has the final decision, decided not to proceed with criminal charges against Lew, Lew's advisers or those working within Coles Myer. The Chairman of ASIC told the ABC:
"I think where the community would have had concern is if the community had felt that a transaction was beyond investigation in some way. This transaction was not beyond investigation."
The Etiket transaction
Another controversial business transaction involving Lew related to a single purpose trust called Etiket. The beneficiaries were Lew's family. The trust was used to acquire 2% of Coles Myer in 1989, at a time of very high interest rates.Lew offered competing explanations for what happened next. But the end result was that the Coles Myer shares were assigned to Premier Investments for an $8 million profit.
A Queen's Counsel who investigated the transaction said:
Well, he very simply bought them for $8.20. There was no substantial movement of the share price, but he sold them to Premier for $9.00. He made 80 cents a share, or $8 million, in four weeks. http://www.abc.net.au/rn/talks/bbing/stories/s10786.htm
TESNA
Lew and his friend Lindsay FoxLindsay Fox
Lindsay Edward Fox AC is an Australian businessman. As of 2009, he was the 10th richest person in Australia, with a net worth of around 1.5 billion . He is best known as the founder and chairman of his family-owned trucking and logistics company, Linfox.- Early life :Lindsay Fox was brought up in...
formed a consortium to acquire Ansett Airlines after it had an Administrator appointed. They sought and obtained the exclusive right to negotiate to purchase the airline.
They obtained the agreement of various stakeholders in the airline, including trade union members and their representatives. The secretary of the Australian Council of Trade Unions
Australian Council of Trade Unions
The Australian Council of Trade Unions is the largest peak body representing workers in Australia. It is a national trade union centre of 46 affiliated unions.-History:The ACTU was formed in 1927 as the "Australian Council of Trade Unions"...
ACTU Greg Combet said Lew had breached 'repeated commitments'http://parlinfoweb.aph.gov.au/piweb/repository1/media/npaper_1/8p0660.pdf.
During this time spent negotiating, the administrators had been persuaded to continue to operate the airline despite heavy losses which reduced the amount ultimately available to creditors, which included employees owed entitlements.
Lew and Fox had committed to take on $183 million of these entitlement obligations if they acquired the company. These commitments and their statements that they could and would proceed with the acquisition led the trade unions with members involved in the business to support the bid.
The consequence of Lew's withdrawal was much embarrassment for the ACTU, which had strongly supported the Lew-Fox bid. Lew's withdrawal also cost 2800 people their jobs http://www.abc.net.au/7.30/content/2002/s492463.htm.
Coles Myer board
In September 2002, Lew was voted off the board of Coles Myer after the Chairman of the company former banker Stan Wallis campaigned for Lew's removal. He successfully lobbied major institutional shareholders, including insurance companies, banks and large investment firms to take the rare action of voting against an incumbent director.Prior to the vote, Lew campaigned heavily spending an estimated $10 million campaigning for his re-election focusing mainly on smaller shareholders. He was successful in obtaining millions of proxies but they were ultimately insufficient.
Premier Investments and Just Group
In March 2008, Lew returned to the public company stage, rejoining the board of the listed company Premier Investments, as its Chairman. At the same time, Premier announced a takeover offer for Just Group, one of Australia's largest retailers which owns Just Jeans and other retailers.Analysts criticised the offer for being too low and comprising less than half in cash.
In publicly explaining his offer, Lew said Just Group was trading worse than had been disclosed to the investment community. Just Group's Dr Pollard disputed this claim and threatened to report Lew for breaching the Corporations Law and rules relating to takeovers for making claims of this kind outside the formal documentation associated with his bid http://www.theaustralian.news.com.au/story/0,25197,23599589-20501,00.html.
Media commentators were strongly critical of Lew's tactics http://www.theaustralian.news.com.au/story/0,25197,23589090-30538,00.htmlhttp://www.theaustralian.news.com.au/story/0,25197,23599518-5001641,00.html, with one describing him as "stunningly gauche".
Personal life
He is married to Rosie and his children PeterPeter Lew
Peter Lew , is an Australian businessman from Melbourne.He is the Chairman of P Lew Investment Group, owner of the BrandBank Group of Companies and has extensive interests in retail, financial services and property investments inherited from his father, Solomon Lew...
, Stevie and Jaki are active in the Lews' business empire.