From the safety of my holiday deck chair, I’m watching the unfolding tale of the Whitehaven Coal hoax with growing amazement.
On January 7, 24-year old environmental activist Jonathan Moylan issued a hoax press release which announced that the ANZ Bank had pulled $1.2 billion in loan funding to Whitehaven’s controversial Maules Creek coal project in the Gunnedah basin of NSW. Posing as an ANZ flak, Moylan wrote on bank letterhead that the reasons were the volatility in the coal market, cost blowouts and its corporate social responsibility policy.
In nearly 30 years of journalism I have never heard of a bank making such a statement, let alone discussing the affairs of clients in this way. It just doesn’t happen.
Remarkably, several media outlets dutifully reported the press release as news. Mayhem ensued. More than 2.8 m Whitehaven shares were traded in just 23 minutes causing an 8.8 per cent collapse in the share price. Within half an hour, the hoax was revealed and the share price recovered most of its losses. The net cost to investors was about $450 000 in market cap.
Now we have the Australian Stock Exchange and various political types baying for the blood of Moylan who apparently lives in the forest where the mine is set to be built. His PC and phone have been imaged by the ASX. There is talk of all manner of criminal and civil charges against him. He is being cast as a saboteur, a public menace, a threat to the capitalist order. Anyone who doesn’t demand his immediate hanging is condemned as irresponsible.
A few pertinent comments are needed here. He didn’t send his press release to the ASX, stockbrokers or shareholders. He sent it to journalists who should have known better. These reporters didn’t think to call the company, the bank or the ASX. They just printed it. No checking, no calls, no nothing.
They got punked by a kid up a tree in the forest. It’s a sad commentary on the state of financial journalism. It shows how much the PR industry has taken over the role of the journalist. It was on the bank’s letterhead, so it was regarded as fact. To blame the hoaxer is simply ludicrous.
Moylan has exposed the fragility of the system and should be commended for it. It begs the question: how much other PR twaddle makes it into print to mislead and dupe investors to part with their money? Plenty is the answer and usually it’s much more subtle than Moylan’s efforts. That no-one questioned the veracity of the information is astounding to me. It was so clearly implausible. Yet we don’t hold the media to account, only the hoaxer. As far as I can see, he’s guilty of crimes against personal hygiene and nothing more.