Medibank policyholders could make money from the sale

Are you a Medibank Private policyholder?  Have you been one for a very long time?  Well, an investigative media report today is saying that you could be set for a windfall if the Government admits it has changed the rules for the insurer, so it could one day privatise it. A petition running at Change.org is demanding that the Government  recognise policy holder equity as was done in the demutualisation of NIC, NRMA and others.  And this windfall could be as large as $30,000 according to some claims in the media.

The health insurance company, which is in final preparations for what is suggested to be a 4 billion dollar public offering was found by investigative journalists from The New Daily to have officially recognised “members” as equity holders in the balance sheet of the business between 1993 and 1996.  “In December 1997 the government directed the Health Insurance Commission to transfer equity of the fund to a new government-owned company, known as Medibank Private Limited,” said The New Daily report.

“Without any explanation in the notes to the 1997 accounts, the term “members’ equity” was removed from the balance sheet by government accountants and replaced with a new concept known as “fund equity”.”

The amount that just disappeared from the balance sheet was, according to the company’s annual report, more than $350,000,000 in 1994.

The Government had changed the legislation and accounting, rightly or wrongly we don’t know, to make themselves the owners of Medibank Private without paying out the declared equity holding members.  This is likely to come back and bite them in coming weeks if deemed inappropriate by accountants and legislators.

The Change.org petition is called “Medibank Private Members must get shares in demutualisation”.  It currently has just 1,754 signatures but with proper financial discovery of what the demutualisation could mean, this will no doubt get a lot larger.

“The government through Medibank Private have always called policy holders members, and the Medibank sale must recognise members per previous demutualisations of health fund NIB , NRMA Insurance etc etc. in both these demutualisations members/ policyholders received up to 6000 shares. Mr Abbott you will not get away with short changing Medibank Private members of up to $30,000.00 in possible benefits from their loyal membership to Medibank Private. please sign this petition and show Mr Abbott that members will not accept the sale without benefit to us loyal members.”

If you are a Medibank policyholder, this will certainly be an issue to watch in coming weeks as the company moves closer and closer to demutualisation.

Have you been a Medibank Policyholder?  For how long?  

What are your thoughts on this?  Could you be eligible for a slice of the Medibank Private IPO revenue?