http://www.fairfax.ca/financial.htm
Quote, "In 1985, we began with $30 million in assets and $7.6 million in common equity.We ended 2009, 24 years later, with $28 billion in assets and $7.4 billion in common equity – almost 1,000 times higher than when we began. More importantly, since inception, book value per share has compounded by 26% per year, while our common stock price has followed at 22% per year."
http://www.cjr.org/the_audit/canadian_club.php
In an email exchange, Francis told us Fairfax’s stock ownership of Canwest was “irrelevant. The stake is tiny—the Asper family controls the empire through” multiple-voting shares. (Like The New York Times Company or the old Dow Jones, say, Canwest has multiple tiers of stock that allow the original owners to control the company without owning most of the shares. That’s because each of their shares gets multiple votes.)
Francis compares writing about Fairfax to writing about a company who advertises in the paper. “There is no conflict any more than there would be a conflict writing about a bank or other corporation that advertises in any of the Canwest media properties,” she says. She also says it isn’t necessary to disclose it because it’s so widely known. “Editors felt that biz readers know that,” she says.
Ian Karleff, the Financial Post’s managing editor, uses similar reasoning to explain why it’s not necessary to disclose Fairfax’s stake in his paper’s parent. “It’s a passive investment as far as we know,” he says. “I’d think there are a lot of individuals that own a stake in Canwest. If it got to the point where they actually had control or were on the board we would disclose it.”
Karleff says Post editors give her leeway on such decisions. “Diane—she’s been around a long time,” he says. “She knows the boundaries, she knows what would be crossing the boundaries and I would trust that decisions she makes in her position and years of being financial journalist, that she would know when she should disclose that. As editor at large, we do leave a lot of those decisions up to her.”
Still, Karleff acknowledges: “It’s a good point to raise and something we will consider in the future.”
In this case, the Post made a serious mistake. Fairfax’s stake is neither “tiny,” “passive,” nor remotely comparable to that of an advertiser. While Fairfax has little voting power, it owns about 10.5 percent of Canwest’s economic value (known as market capitalization). It beggars belief that Watsa and Fairfax don’t have clout, if for no other reason than their ability to push he stock price down by selling off their stake at a time when Canwest can ill afford it: Its shares are down 70 percent so far this year."
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Quote, "Francis and her editor both say it wasn’t necessary to disclose that because Canwest’s voting shares are controlled by the Asper family. If only it were that simple.
The saga begins with a July 28 column by Francis headlined “Fairfax Financial beats bad markets.” In it she interviews Watsa about his successful bet against credit markets, which has resulted in a wave of cash for the firm this year. At the time, the shares were languishing (though they’ve jumped more than 20 percent since). The questions, except for one about an investigation by the Securities and Exchange Commission into alleged accounting irregularities at Fairfax, weren’t exactly hard-hitting, including this one:"
