Thousands of Australian investors rue the day they invested in the Centro Group of companies. The loyal ones look to have lost all their money, bar a few cents if the gods allow.

A significant group of Chinese-Australian investors, who own 15% of Centro, wonder what happened to the Australian laws that they’d expected to protect them. They belong to the Centro Shareholders Association.

I accompanied some association members to a meeting at Centro’s Melbourne offices today to see if their 15% was worth anything.

It was a bizarro meeting. The Centro chairman, Paul Cooper, told my friend, a major shareholder, how carefully he had tended her small fortune (her group had invested $50 million) but how, unhappily the small fortune had vapourised under his board’s stewardship. But it wasn’t his fault. He assured us he had done the best he could, every day, to prevent that.

She told him she had trusted him up until this very day. Now, she didn’t trust him at all. Nor his management. Neither did she trust the Australian regulatory laws that she believed should have protected her group’s investment.

She had hoped to recover a reasonable amount per share for her group and for all shareholders. It didn’t seem much to ask out of a $9.4 billion deal, out of which the hedge fund debt holders would make billions, the private equity group Blackstone — the buyers — would make billions and Centro would be freed of its assets and debt and resurrected in a pristine form under another name.

But Cooper told her something akin to her having less than Mr Buckley’s chance of getting anything but a tiny share of the $100 million the senior debt holders (mostly JP Morgan and various hedge funds) had mysteriously set aside to be divided between shareholders and a multibillion-dollar list of creditors.

I suggested the shareholders would be lucky to get a cent a share. Cooper disputed that but couldn’t specify an amount.

Cooper, who has developed a lean and hungry look from his labours, speaks softly and somewhat paternalistically. A slightly arrogant example of your run-of-the-mill legal bartender.

But he looks like he wields a big stick. And he does. Unbeknown to these shareholders, he had recently popped over to the ASX and had obtained its permission to go ahead with the recently announced $9.4 billion sale of Centro’s US assets without having to get the approval of Centro shareholders.

Well, you could have knocked me over with a wooden nickel! The shareholder, too. We thought he needed shareholder approval to sell more than half the company’s assets and we were hell-bent on ensuring the association’s 15% would vote for Armageddon rather than any proposal these guys promoted.

But no. The Centro boys have the shareholders snookered — unless someone can persuade the ASX to change its mind. Or God intervenes on behalf of the pensioners who’ve been left bereft.

The Centro debacle is a dribbling black beast in the heart of the Chinese investment community — from Melbourne to Hong Kong to Beijing. And the beast is dribbling bile on Australia’s perceived lack of protection for overseas Chinese corporate investors here. The Australian government can only hope that the Chinese commodity buyers choose not to revenge themselves on our prosperous mining community.

The shareholders who got out of Centro  earlier mostly scored various levels of losses, but less than the stayers. There have been few winners among Centro shareholders.

The exceptions are surely the advisers, to whom Centro has paid about $300 million over the past three years — one assumes such payments were to help avoid the void in which Centro now wallows, underwater with no hope of rescue for its shareholders. Oh, and I guess it would be churlish not to include Cooper among the fortunate few.

As Adam Schwab pointed out in Crikey (September 16 last year) Cooper was part of the Centro board that approved “the entity’s acquisition binge … that resulted in the company’s almost folding under the weight of its tens of billions of dollars of debt.”

Schwab said: “In total, Cooper’s roles at Centro will see him take home about $480,000 this year, making him one of the highest-paid chairmen in Australia, despite Centro’s minnow status …”

Cooper said in late 2009 he would vigorously oppose any attempts by corporate watchdog ASIC  to sue him and former directors over the release of the 2006-07 Centro accounts. ASIC launched proceedings on October 21, 2009, to disqualify Cooper, some former directors and staff from managing corporations. The case, described as “open” in court documents, is yet to be resolved.

Many pensioners lost their all in Centro. Most are unbelieving that it could have happened. They shop at Centro shopping centres. Centro had a good cash flow.

Somehow, its board, its management and the global financial crisis emptied the piggy bank. Then the banks, the hedge funds and a lucky private equity group called Blackstone, progressively did what little pigs do and gobbled it all up as its debt spiralled.

It doesn’t seem fair. But as one of Melbourne’s top investment bankers said today: “There’s no point complaining. They are only shareholders. Who cares about shareholders. The corporate regulator has a lot to answer for.”

I wonder whether our winsome PM Julia Gillard can explain that to the Chinese.

They are waiting for someone to do it.

*(Martin Dougherty  is a former editor of The Daily Mirror, Sydney: Truth, Melbourne, and group managing director, editorial, of the Fairfax Group. He retired as a part-time business consultant after contracting lung cancer three years ago).