Geoffrey Cohen

"Stokes continued to look beyond shopping centres. Planning and building regulations were multiplying faster than the population. The fun had gone out of it, and while there was still money to be made, the golden days were over. Having founded CPI as a public company, in 1977 Stokes and Bendat decided to privatise – but through a strange mechanism. Instead of the pair buying directly, their associated private companies, Retford Pty Ltd and Villaro Pty Ltd, employed a mining company, North West Mining NL, to make a takeover bid. The money for the takeover was raised through a loan organised by North West from the merchant banker Hill Samuel, which later became the Macquarie Bank. The loan was to be repaid by declaring a dividend funded from revaluing the shopping centres after the takeover deal was complete. The complicated deal was put together by Geoffrey Cohen, for years Stokes’ corporate lawyer, and director of many of his companies. Also acting for the pair at this time was David Gonski, then with the law firm Freehills. A key feature of the Stokes–Bendat success, as it had been with that of the Stokes and Merifield partnership, was their ability to hire the best advisers and work closely with them. Why was the deal done through the proxy company? Stokes later told journalists there was ‘nothing untoward about it’. The reason had been legal problems to do with tax and capital distribution. ‘It would not have been possible without the interpositioning of another public company.’8 It was less than a complete explanation. Retford and Villaro were trust companies, and the beneficiaries of the trusts were members of the Stokes and Bendat families. The directors were Cohen and a chartered accountant. Stokes and Bendat did not technically control the companies but had the power to appoint and remove their trustees. In fact, they were clearly their companies, used both for this transaction and for their interest in South Western Telecasters. When it came to CPI, Stokes and Bendat were selling their shares to their own associated companies and asking other shareholders to follow. It was effectively a related-party transaction but without the level of transparency that would have been necessary if the deal had been done directly, rather than through North West. The offer document declared that the shares would ultimately be transferred to Retford and Villaro, and it also disclosed that Stokes and Bendat had ‘an association’ with those companies but was less than completely transparent about the nature of the association."

"The Perth Stock Exchange raked over the various entities behind North West Mining’s offer. Stokes and Bendat were linked to a 47 per cent slice of CPI shares through two other family companies, the Stokes family’s Vetlabs Pty Ltd and the Bendats’ Paulla Investments Pty Ltd (named after Bendat’s fortunate adult children Paul and Laura). As with Retford and Villaro, the issued capital of these two family companies was held in trust by Stokes and Bendat’s tax advisers, their solicitor Geoffrey Cohen and an accountant called Harrington. The stock exchange was uneasy about the ‘Russian doll’ layers of ownership and control of the various companies involved in the takeover, and whether minor shareholders had a clear understanding of what was happening. The exchange chairman noted in a public statement that Stokes and Bendat would obviously have influence over the trustees but concluded that the two businessmen did not technically control the trusts themselves. ‘Shareholders would no doubt be able to view the acceptance of the offer . . . in this light,’ the statement concluded. Turning to the valuation of the shares at $1, the exchange conceded the transaction did not need compulsory valuation by a qualified valuer or at least two directors — but stated it was disappointing that the CPI board had not sought an independent opinion of the offer. ‘Despite the controversy,’ Bill Rayner would note later, ‘shareholders voted with their hip pockets.’ On 29 June 1977, the company announced a 98.6 per cent acceptance of the North West Mining offer. Game, set and match to Stokes and Bendat."