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(generated from captions) have a few difficult to control

people in them. What I would

say though is that Barry

O'Farrell and his team are

doing very well. They're ahead

in the polls, this is not

common for the NSW Liberal

Party and I don't want to do

anything that upsets their

apple cart. Are you seriously

saying what happened to Scott

Morrison has nothing to do with

factionalism? It has nothing to

do with anyone who I would

regard as a senior person of

influence in the party. My

understanding is - By that you

mean it has nothing to do with

the leader of the - what they

call the far right faction

David Clark? I don't accept

that terminology but certainly

to the best of my knowledge all

serious people inside the

party, whether they be of the

so-called left or the so-called

right, are appalled and what

happened in that particular

branch was the act - was an act

of madness by a couple of

mavericks. And where do they

mavericks come from because

we're being told those

mavericks are part of the far

right faction of the Liberal

Party? Well, - Have they been

disown ed now? If they are, to

the best of my knowledge they

have been disowned by everyone

else in the party and also to

the best of my knowledge, at

least a couple of so-called

conservative branches in that

part of Sydney have begged

Scott and his wife to join

them. In fact I believe that

Scott Morrison has been knocked

over in the rush of branches in

southern Sydney wanting to have

him as their member. So what

happened in this case then?

What's your take on what

happened, who's involved and

why the sitting member is

forbidden from being part of a

branch? How does that

happen? Well my understanding

is that a couple of disgruntled

people in that branch managed

to persuade a meeting of 10 out

of 50 members of that branch to

reject an application. Now it

was silly, it looks bad, it

shouldn't have happened but

don't think that this is

representative of the Liberal

Party. Former deputy leader of

the Liberals in the State's

upper house John Ryan says the

party's doomed unless it can

get these factions under

control. He blames what

happened there on the far

right. Well, as I said, the

individuals who have been named

in the paper as being

responsible for the actions of

insignificant individuals and this branch are two fairly

to the best of my knowledge

they have been totally disowned

by all the senior leaders in

the party, whatever part of the

philosophical spectrum those

people occupy. Mr Ryan says -

this goes further than what

happened in that particular

branch. He says far right

factional heavy weights have

been use ing this arcane power

to stop people remaining or

being members of different

branches, extensive to block

people they don't like from joining the Liberal Party. Well

there has been a power for a

long time for branches to

refuse to accept new members.

As far as I'm aware that's been

in the party since the year dot

and from time to time that's

been exercised by left branches

by right branches, by centre branches. Wasn't it meant to

stop people of bad character

entering the Liberal Party, not

simply factional opponents? I

completely agree. But let's not

be too pure about this.

Politics is a tough business

and whether you're left, right

or centre, whether you're

Liberal or Labor sometimes the

rules of politics have been

used to keep your opponents out

of positions of power including

brampbls. But if, as you

acknowledge yourself, this

power is used by factions to

keep perfectly legitimate

otherwise Liberal Party members

out of branches, that's

disastrous for democracy within

the party, isn't it? Well look,

it's a power that's always

been. There I'm sure the same

power exists in the ALP,

whether it's at the branch

level or the executive level.

Certainly I think that

political parties are always

going to want to be able to say

no to some people. It comes at

a very bad time for the Liberal

Party. Five people have now

been charged over the Lindsay

fake racist leaflet scandal,

now the Federal Government says

it's going to have an inquiry

that will go beyond the police

investigation. Will the Federal

Liberals cooperate with a

government inquiry? If it's an

inquiry by the joint standing

committee on electoral members,

obviously there are Liberal

members of that committee and

if the committee does an

inquiry those people will be

part of it, but if we're going

to inquire into unauthorised

dodgers, malicious dodgers

let's not think that the one in

Lindsay is the only one that's

ever happened. There have been

dodgy dodgers put out in all

sorts of electoral contests by

all sorts of people including

many over the years that have

benefitted the Labor Party, so

again, let's not be too Simon

pure about all of this. What

are you saying there wasn't

anything really to worry about

because it had happened

before? I'm just saying that

whatever turns out to be the

case in Lindsay and I am not

for a second defending that,

let's not think that - You are

defending it politically in a

sense in that you're saying the

Labor Party's done it too? I'm

saying let's not think that one

side has a monopoly on dirty

tricks. There was a

particularly damaging dirty

trick for the election. It was obviously damaging in terms of

the content. I accept

that. Nose n those leaflets. I

accept that. So do you accept

that all the sort of Liberals

who may be under suspicion for

having some form of involvement should give evidence before

some sort of inquiry? I do

think if a committee wants to

inquire into thing I'm the last

person to say don't inquire,

but if you're going to have an

inquiry, let's have a fair

dinkum inquiry and let's look

at dirty tricks of a mor

general nature, let's not think

that the only dirty trick that

ever happened was what happened

in the Lindsay election just

before November 24 last

year. Let's put it this way

though, if such an inquiry

happens and you're called to

give evidence, you will give evidence? Well the thing is

this, you've got to have a

reason to call people otherwise

it's not an inquiry, it's a

witch hunt. But if someone

decided there was a reason to

call you or any other sitting

member of the Liberal Party,

who are members of the Liberal

Party... And if Senate Steve

Hutchins was called, for

instance, of the Labor Party,

we would need to have evidence

that he might have been in some

way involve ed in less than

savoury activities. Well, I

mean, you'd have to have

evidence before you'd call

him. For example, if something

happened in your own living

room, for which a number of

people subsequently were charged, you'd expect that

person to appear before an

inquiry, wouldn't you? Well it

depends very much on whether

that person had any

involvement. If that person was

absent, if the people who were

involve ed have stated that

they were the people who did it

and there is no reason to think

that they are fibbing, I think

to ask people who are beyond

that, it just looks like, as I

said, a fishing expedition. I

just looks like a giant

smearing exercise. Look, there

were five people apparently

involved in this. These people

have been named, they've been

shamed, they've been

humiliated, they're now being

charged, those that are members

of the Liberal Party have been

expelled in the most

ignaminious circumstances, how

many times do we have to put

these people in the

stocks? Just to take that

point, the the 'Australian' reports the State director Jeff

Egan who was expelled has subsequently been bought back

into the fold. He's a member of

the State executive It's a big difference. Was he brought back

into the party though? Not to

my knowledge. And frankly, he

shouldn't be. All of this has

federal implications, doesn't

snit John Howard came from NSW,

the current leader Brendan

Nelson comes from NSW. So

you're trying to suggest, Tony,

that really it's all Brendan

Nelson's fault or John Howard's

fault. No, I'm talking about

the factional issues in NSW.

Most of the future Liberal

contenders come from NSW,

yourself, Malcolm Turnbull and

Joe Hockey all come from NSW.

It would be in all of your

interests to end this

factionalism in NSW, wouldn't

it? I agree with you, Tony.

I've always said that factions

are at best a necessary evil

and the only good faction is an

anti-faction faction, a faction

that is working to end factionalism. I completely

agree with you there. You're a

member of no faction? Well

look, as far as I am concerned,

I judge things on their merits.

I don't vote because someone

rings me and says he's one of

ours, or this is our line. To

the best of my knowledge, and I

have reasonably extensive

knowledge now, no members of

the Liberal Party are robots

putting up their hands because

some factional war lord has

commanded it. If you go to

Liberal Party branches they are

conducted in the national

language, we don't - Let's not

be naive about this. The main

use of factions is the power

base to use a stepping stone

with numbers into power, that's

the main use of factions. And

can I tell youtown you - And

you want to get power yourself.

In the end you want to be

leader of the Liberal Party,

you told us last year that. In

the end - So you'll need

factional support, won't

you? No, no, no in the end,

Tony, I want my arguments to

prevail on their merits and if

I was ever to win a ballot

inside the Liberal Party, I

would like to think it's

because my colleagues regarded

me as the best

candidate. Alright, on a

completely different matter,

you've now on the record in

today's Australian warning of

the dangers of bipartisanship

with Kevin Rudd's government.

Do you think Brendan Nelson's

actually gone too far down that

direction already? No, I don't,

but I do think that bi partisan

ship can't be a way of bluffing

the Opposition out of

appropriate criticism of

government policies and

- That's my question really,

has that already happened on

climate change, on Iraq, Work

Choices, on sorry to the stolen

generation, have you been

bluffed into bipartisanship on

these issues? The Government

has invited bipartisanship on

the issue of indigenous affairs

and we are happy to offer

bipartisanship in the sense of

trying to avoid political point

scoring and the kind of if you

like, head banging which all

too often is a part of the

daily political debate. But

I've got to say what we won't

do is support policies that we

think are going to be seriously counterproductive and the

Government currently has before

the parliament legislation that

would seriously water down the

intervention in the Northern

Territory, in particular a

restoration of the permit

system including a bizarre

requirement that journalists

will only be able to enter

these remote territory

townships with ministerial

permission and also watering

down the houfd Government's

blanket ban on pay TV porn. Now

these are backward steps, they

shouldn't happen and as far as

I'm concerned, and as far as

Brendan Nelson and the

Opposition are concerned we

won't be supporting this

legislation. On that final

issue, you're saying the

legislation includes some sort

of clause that said journalists

would have to seek permission

of the minister to go into

indigenous communities? That is

my construction on the

legislation based on the

legislation and the minister's

own second reading speech that

while the old permit system

where you had to get permission

from the Lands Council will not

be restored in respect of

journalists, instead of having

to get permission from the

local Lands Council you will

have to get permission from the

minister. Now with the best

will in the world, ministerial

permits for journalists to

cover what may well be a

breaking story in these places

is crackers. Tony Abbott,

obviously we'll look into that further but we thank you very

much for taking the time once

again to come in and talk to us

tonight. Thanks, Tony. Today is the national day of

rememberance in Argentina. It's

the 32nd anniversary of a coup

deta that led to seven year of

brutality. After more than

three decades of bringing those

to justice remain asslow pro.

Richard Reynolds filed this


They there were marches like

this one in towns across

Argentina in the days leading

up to the national day of

rememberance, the anniversary

of a coup de, the a, the in

1976. It's suppose to remind

Argentinians of the dictator

ship of the dirty war. It's

estimated the regime mured some

30,000 during this time.

Politicians, union leaders an

human rights advocates all

exhorted the crowd to remember.

TRANSLATION: This memorial

indicates a search to preserve,

build and strengthen

rememberance. This is one of

Benz Aries busiest streets.

Right in the middle of the city

lies the military base and the mechanical school. It's been

turned into a museum to remind

Arj teenians this was the heart

of the terror machine during

the dictatorship. It's

estimated 5,000 were kidnapped

and taken here. Behind these

doors going down the stairs is

there is a basement. The

basement contained the torture

rooms. This man made it out

alive but fewer of 100 of those

5,000 did. There is another

lesser known part of the

horror. Hundreds of detainees

were pregnant women. The

mothers were murdered but the

babies were handed over to

military families and friends

gaichbd forged birth

certificates. They were lied to

about their real parents. This

woman was one of those children. She actually

criminally charged her

purported parents with

kidnapling. Right now she

doesn't know when she was born

and in what conditions her

mother gave birth and her

mother and father they were a

political activists in

Argentina during the '70s and

they were kidnapped by the

military. She wouldn't speak on

camera. The cases of these

stolen children have become the

heart of how Argentines now

remember those horror. The

cases against the former

generals simply don't arouse

much interest these days. Sails

is a documentary centre that

keeps the documents and

testimonies that track what

happened during the dirty war.

The founders wanted to make

sure the people here remembered.

TRANSLATION: The stories are

sad but there are also family

members still live and they are

victims as well and are working

towards the future. The demand

of justice and memory are positive. The Argentine Supreme

Court threw out an amnesty law

two years ago and prosecutions

have begun again. Since then

more than 300 cases have been

started but there have been

only 14 convictions. I

considered that we started the

process of justice and we are

more near but it's not

enough. The new government

seems eager to see these

prosecutions proceed. The

judiciary's attitude has

bulk-bill described as half

hearted. Things are moving very

slowly and public support

remains lukewarm. After all

people here still refer to the

30,000 murdered as the

disappeared as if they would

rather not think of them as

dead. This is where many of the

so-called disappeared ended up.

This is the an enormousest

ware, detainees were drugged to

the point of unconsciousness

and then flown out over theest

ware and dumped in to be eaten

by the sharks. Just like those

bodies many in today's

Argentina would prefer the

questions of the last military

dictatorship just went away.

Time for a look at the weather:

And that's all from us. Late

line business womaning up in

just a moment but if you wuld

like to look back at tonight's

interview with Tony Abbott or review any stories or

transcript yous can visit our

website. But now here's

'Lateline Business' with

Eleanor Hall.

Tonight new deal, JP Morgan

raises its bid for Bear Sterns

but will it get through? They

had to get majority approval

from the shareholder an that

would have been a problem and

take an bit longer for the deal

to go through. This way they

don't have to get majority of

the shareholders to approve the

deal. Shares rally but it seems

there's no end in sight to the

bear market. And stepping down.

Did Santos fire its chief

executive. Well when an

announcement is made as

abruptly as this when a CEO

leave, there is also the

question as to whether they

were pushed. It's possible,

though it's also possible that

he's accepted a position with a

competitor perhaps. First to

the markets and investors

returned from their Easter

break is a confident mood

buoyed by positive US housing

figures and an improved offer

for Bear sterns. Shares jumped

nearly 4%. The All Ords was up

173 points and the ASX 200

gained 191 points. In Japan the

Nike rose 2% with exporter

benefitting from a cheaper yen.

Hong Kong's Hang Seng surged

more than 6%, it's biggest

one-day gain in two months and

the FTSE has jumped more than

3%. US investment bank JP

Morgan has raised it's fire

sale offer for its stricken

rival Bear Sterns. Pressure

sphr Bear Sterns shareholders

as well as the threat of legal

action forced JP Morgan to

increase its aur to US $10 a

share, five times its orange

nad bid. It had been dubbed the

steal of the century. JP

Morgan's acquisition of the

ailing Bear Sterns for just $2

a share. Bear Sterns investors

leaved they'd been ripped off

an unable to quell their

growing anger, JP Morgan

capitulated and increased its

offer fivefold to $10 a share

or more than $1 billion. Jamie

Diamond had a busy week last

week trying to mullify invest

nrs Bear Sterns who were

unhappy with the $2 a share

take out. He had two problems

he ran into. One not only upset

investors, already shareholder

lawsuits coming forward last

week but the other thing was

keeping top talent at Bear

Sterns post acquisition. It

also didn't help that lawyers

for JP Morgan had apparently

made a mistake in the word of

the original contract. The 'New

York Times' says JP Morgan

laurs inadverntently included a

sentence that would allow Bear

Sterns share horlds the power

to block the sale and seek a

higher offer while still

forcing JP mor gan to guarantee

Bear's trades. To get around

that hurdle 95 million new Bear

Sterns shares will be issued to

JP Morgan giving the group an

immediate 40% stake. If they

hadn't issued shares they had

to get a majority approval from

the sharehold ers and that

would have been a problem and

would have take an bit longer

for the deal to actually go

through. This way they don't

have to get majority of the

shareholders to approve the deal. Other terms of the

original deal that have changed

include the role of the Federal

Reserve and its special

financing provision. Initially

the Fed was basically taking

all 30 bhl billion of that

first bid of toxic waste, they

were taking all the risk. At

least now JP Morgan is taking

an extra billion dollars of any

losses to that piece of the

portfolio and it seems as if

this was suppose to head off

criticism that JP Morgan was

given just too good a deal to

take on these liabilities. Even

at $10 a share the offer price

just covers the value of the

Bear Sterns head office

building prompting many to

believe that JP Morgan has

still got a bargain. Time

essentially is running against

sharehold ners Bear at this

point in time. It does not

favour them at all in unwinding

of the transaction would not

really favour them. So I think

that in the end $10 may prove

to be the ultimate price

here. Analysts say the offer

will help Bear Sterns retain

staff and stabilise US

financial markets. The only

big risk I'm worried about now

is whether somebody else will

have the same issue. And if

there is somebody else who will

buy them out. Hopefully there

won't be anyone else in the

short run and we'll get some

sanity in the markets. China China's booming

economy boosted annual profit

of the country's major foreign

exchange lender by more than

30% in 2007. Meanwhile the

industrial and commercial bank

of China, the world's biggest

bank by market value says it's

made provisions for a $430

million loss on its subprime

related investments. Its annual

earnings rose by 65% to $13

billion. The higher bid for Bear Sterns gave Wall Street a

boost and the positive lead was

followed with conviction on the

local market. For analysis of

the day's action I spoke

earlier to Marcus

Padley. Marcus Padley thanks

for joining us. A strong start

to the week with the ASX 200

surging more than 200

points? Yes, fabulous start.

Seen the market up 227 points

today, that's 3.7% and that is

a first really positive day

we've had in a while. It comes,

of course, on the back of a

448-point rise in Wall Street

in the last two sessions and

it's been led by financials.

Basically the main issue in the

US is a further lending by the

Fed and also a Bear Sterns bid

which is up 90% from the

original bid which is

symbolically sort of suggesting

that the financials may be

bottomed and that the worst is

behind us. So everybody's

really got the bit between the

teeth. The financials led, as I

say. The we also saw a lot of banks performing extremely

well. The bank sector was up

5.2% and we still see resources

lagging a little bit at the

moment. So do you think this is

the end of the worse for the

financials? Nobody knows that, Eleanor, that's the real answer

to that question. Um, but

there's absolutely no doubt

some of the most rapid gains

are going to be made in the

initial few days of the

recovery from the bottom of the

bear market and nobody wants to

miss out on those. My feeling

is you could buy in a month's -

or a month after the bottom of

the market and still make some

sensible money. So there's no

need to rush in but you can't

blame traders for buying the

market after two 400-point plus

gains in the last week and a

half and two sessions where the

market was up 448. If you're

going to try and catch the bottom this is probably the

time to have a go at it. So do

you think it's possible to say

whether we've reached the

bottom of the market generally

yet? There are various things

to look at apart from just

whether the market's gone up

and down. There's also a

variety of sort of valuation

issues which are dragging

people back into the market.

The bank sector, for instance,

got on a PE Of below 10 times

on average and a yield over 10%

on average. We've seen a fall

in the banking sector of

something like 36%. Even BHP

and Rio which are suppose to be

supported by China, we've seen

falls of 35% in BHP and 44% in

Rio. Fortescue one of the

market darlings has fallen 68%

from the top. It's doing

slightly better than that now,

about 30% down from the top.

There are all sorts of reasons

to want to jump into the market

and grab that value and nobody

knows so the first bit of

momentum and people will take

the gamble and I think it's a

pretty good gamble and there

are certainly a lot of

commentators suggesting or one

great comment from Southern

Cross Equities this morning is

cash is no longer king. A

couple of brokers are starting

to look at listed property

terrorists again, that's a sign

of optimism, isn't it? It s

we've actually seen a rather

sort of slow performance from property trusts today, they're

only up about 2.6% which is

underperforming the market but

our morning meeting discussion

was around property trusts, the

fact they're trading 20, 30%

discounts to NTA at the momed,

that you've got yields ranging

from 10 to 18% in the sector

and even if there were asset

write downs from here or

cancelled developments, it's

pretty much in the price from

here and also property trusts

are one of those sectors which

is slower moving, less volatile

traditionally, and is one of

the safer ones to tell people

to get back into when you think

it's near the bottom of the

market. So it's probably the

least risky sector to say buy

at the moment and there were

apart from our there's were two

other major brokers with

research out today and a few

buy recommendations in the

sector. You said resources are

being left behind, why is

that? They've been left behind

really over the last week.

There was a big sell off,

everybody suppose to be going

short on the thing, of course, as enthusiasm for Chinese

growth sort of waned a little

bit on fears that US recession

was going to affect China.

That's why they got sold off

last week but just overnight

they've lagged on the back of

metal prices being down, the

material sector has not been

performing well in the US.

We've seen downgrades in US

companies of late and the

currency markets have been

getting concerned about

commodity currencies and on the

back of that when you've seen

massive falls in financials, if

you're looking for stocks to

buy on the back of good news in

the financial sector in the US

then financials have taken the

lime light. But I'm sure China

will be here nor a while and we

can get back into resours

reasonably safely on the long

term. Thanks for joining

us. Nice to talk to you. To the

other major movers on our

market today.

European markets are now about halfway through their

trading day. For the latest

let's cross to Nick Parsons the

head of market strategy. Thanks

for joining us. Were you

surprised by the strength of

the rebound, the FTSE up 3%

today? I can't say we were

surprised by it when you look

at the price action that we'd

seen in New York overnight and

remember that the sharp falls

we saw last week weren't just

confined to the banking sector.

We had the soft commodities

were down 10%, sugar, wheat,

corn and others. We had gold

saw its biggest one-week

decline in 25 years so as well

as the banking sector lots of

other sectors got hit. The

market was really priced for

the worst going into the Easter

holiday and quite simply not

only did the worse not happen

but actually nothing happened.

It was very quiet weekend news

wise so we came in this

morning, started to reprice the

market and in London,

Frankfurt, in Paris and

elsewhere across Europe markets

are up somewhere between 2.5

and 3.5%. Is so is this the

start of a real rebound or

not? I don't think it's - I

don't think it's possible to

call the bottom. If we go back

to 2002 and 2003 you will see you got a second chance to get

into that market around four

months later. The market actually bottomed four months

before the fall of Baghdad and

most people used that as dating

the start of the new bull

market. It actually bot ped in

October the previous year. So my sense is there's no rush to

pile in there. I can certainly

see why we're going so see gains approaching perhaps double digits over the course

of the next few week bus then

on when I think reality begins

to bite again we'll see a bit

more disappointment going into

the early summer months up here

in the nonth r north. HBOS had

a particularly good day, what

was driving that? We were up

17% in that stock at one point

during the day not only is St

Stock exchange and all the regulatery authorities in

London looking at the patterns

of trading around that

particular stock on last

Wednesday, but the executive

threw several hundred million board clubbed together and

pounds at the stock in a vote

of confidence and really that

really squeezed out the last

remaining shorts. But again it

wasn't confined to that stock,

all the banking stocks in

London up between 5% and 7% and

with the end of the quarter on

the horizon next Monday there

is some hope the Bank of

England might be injecting some

fresh liquidity and accepting a

broader range of paper in its

operations and that's helping

calm some of those really

frayed nerves that we had in

the banking sector last

week. In a few hours we'll have

some more data out on the state

of the US economy, consume er

confidence, housing prices, how

important are these figures for

investor sentiment? I think

they're important but they're

not really going to tell us

anything we don't already know.

I think they will be important

because they'll allow the

headline writers talk about

dudget digit house decliens an

we haven't had 10% off US house prices since the great

depression. We ask ourselves is

anybody going to be surprised

by that? Does that tell us anything we don't already know?

I don't think so. If consumer

confidence hangs in anywhere

around the sort of reading that

we had last month when we had

75.0 and we're thinking in

terms of 73, 75 is the range

for this afternoon's figures, I

think the market could well

bill build on the rally we saw

yesterday. Soit looks set for a

good day. In fact, you know,

we've got to go all the way

back to last Monday to find the

last time that the US market

moved less than 180 points in

either direction. So I think

we're overdue a bit of calm and

stability and if we can have

that from now until the end of

the week we've probably laid

some good foundations for the

second half of the

quarter. Thank you. You're very

welcome. Thank you.

Construction giant Leighton

Holdings has won an $800

million contract to build

offshore oil and gas pipelines

in India. The company will

build more than 200 kilometres

of pipelines to service a field

off the coast of India's

business capital Mumbai. Shares

closed nearly 9% higher. The

share price was also boosted by

reports the company's close to

winning a contract to build a

new hotel network in China and

India. Santos is looking for a

new boss tonight after the

shock departure of its chief

executive John Ellis Flint but

his abrupt exit has led to

speculation that the CEO didn't

walk but was pushed. Senior

executive David Knox will take

the reins immediately. Did he

jump or was he pushed? That's

the question investors are

asking after John Ellis Flint's

unexpected departure from

Santos. The company says its

chief executive will step down

from his role compesktive

immediately but will continue

in a consulting capacity until

tend of joun June. I think it

came as a pretty big surprise

really. The fact it came out

and said immediately I think is

something that was just that

sort of wording. We really

don't know why it would be

immediate, why it hasn't sort

of lasted a few more months to

sort of get somebody in that

leadership role straight away

but a bit of a surprise.? When

an announcement is made as

abruptly as this, when a COE

leaves there's always the

question as to whether they

were pushed. It's possible,

though it's also possible that

he's accepted a position with a

competitor perhaps. Neither

Santos nor Mr Ellis Flint gave

reasons for his departure but

in its statement to the market,

Santos says Mr Ellis Flint led

the company through a period of

significant growth and

development in his eight years

at the helm. In 2000 the stock

was $4 it's gone up to $13. He

didn't find the big one in the

oil side but certainly changed

the sentiment and the way the

stock was perceived so really

took it from a stock that was

sort of a little bit struggling

to a bit of a power house

within the Australian stock

market. Santos shares rose 0.5%

today while its bigger rival

Woodside lost almost 2% but

over the past year the company

has underperformed the energy

index leading some to speculate

that that's the reason behind

today's announcement. Santos

reported a 28% drop in full

year profit in February but

Greg Hoffman says John Ellis

flint should get credit for

reviving the company's

exploration activities. It's

fair to describe his tenure as

being somewhat less than our

high expectations, production

has basically been flat over

the period it's been up a

little bit and the share price appreciation that we've seen

under Ellis Flint's tenure has really been driven by a higher

oil price rather than any

particular operational

excellence. Santos's executive

vice-president David Knox will

act adds CEO as the company

conduct asglobal search for a

replacement. If he was pushed

that might signal the board was

ready for a more aggressive

CEO. We saw something similar

with ANZ at the end of last

year. They felt they were ready

for a change and perhaps if

this has come from a the board

we'll see a different strategy

under a new CEO. And the new

CEO will have plenty of challenges facing the removal

of its shareholder cap in

November. Pharmaceutical maker

Sigma says fierce competition

for generic drug an the expiry

of product licences has hit its

annual earnings. Profit this

year fell 24% to just over $77

million. But the company says

it expects a better result for

2009 and it's eyeing

acquisitions in the rapidly

consolidating sector. To

discuss today's result and

Sigma's outlook I'm joined now

by. You've offered two profit

warn, how much pressure was on

you today? Well I think that

profit warnings reduce ed

earnings they're not plez ynt

thainges they're something you

take seriously. I think if you

look at today's rul there's

were two things that came out

of it firstly we delivered a

profit in line with guidance.

That's very important because

it demonstrated that the

business is in control, that

we're aware of the profitability of the business

going forward but more

importantly it had a very

strong second half, a second

half which was about 46%

stronger than the first half of

the year. So that's a good

strong basis to go into the new

year we've just gone

into.. Profit was still down

24% though, are you confident

it will recover that much? Wove

pointed guidance between 23 and

88 million for the current

year. You've talked abyour

generics division #4i9 by

reforms to the PBS system,

those rr forms are still coming

through why won't they hit your

profits in the future? Think I

there's a difference between the reforms we're about to face

and are The reforms of the

past. These reforms have been

known in advance. It's given

the industry a lot of time to

adjust and to plan for these

reform s whereas some of the

previous reforms were announced

with a short period of

announcement and

impleltation. You said today

that the company does face

significantly higher interest

cost, you had made acquisitions

recently that you've got to pay

for and yet you're indicating

you were still interested in buying more. Is now though the right time

right time to be loading up on

debt? This is something that we

would have to certainly

evaluate at the time if the

opportunity comes up but the

borrowings that we have made

have been to fund acquisitions

that generate profitability and

it allows us to maintain our

governance and our ratio. Siets

not like we're borrowing this

money and it's not earning

money for our shareholder an

there is certainly a criteria

we'll take into

account. Symbion is something

you're still keenly looking

at? There are pars of Symbion

that are of interest to us and

if the opportunity arose and if

they're available to us at a

price we can justify we would

certainly be interested in

progressing. Are you in negotiation? Well I wouldn't

put it as negotiations,

probably exaggerating where we

are but we've certainly spoken

to the parties concerned, we've

made sure that they're aware of

our interest, which we are

interested, and if the

opportunity arises and at the

right time we can provide a

basis of valuing this business

that satisfies the windows

we'll be interested in

progressing. Can you give us

detail about what parkt parts

of Symbion you're interested

in The consumer products part

of Symbion and some arrangement

that would see us work more

closely with the wholesaling

business of Symbion, the

distribution part of Symbion. The industry has seen