Dean Paatsch, the co-founder of corporate governance firm Ownership Matters, says the share placement process is rife with conflict.

“There is absolutely no transparency at all on who gets access to placements,” says Paatsch. “Your ownership interest can be traded away and you have no right to recompense.”

In the two years to June 30, 2009 there were $45 billion worth of share sales in Australia through placements, according to Ownership Matters. That generated $2 billion in investment banking fees.

A share placement or book-build is a process whereby an investment bank attempts to find a price to sell shares on behalf of a customer. It speaks with selected fund managers or investors as to how many shares they want and what price they are willing to pay.

“The opacity of the book build process is something Voldemort would be proud of,” says Paatsch, referring to the evil wizard in the Harry Potter novels by J.K. Rowling.

“There’s an enormous amount of dark arts in how prices are determined in the book build process,” he says.

“It’s time for a mature debate on capital raising and processes,” says Paatsch. “A huge amount of value can be leaked to conflicted intermediaries.”