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February 2012 Edition ----

Please peruse our resently updated evidence (or proof) of the Government backed Feltex IPO robbery. Click here.

We feel we should comment on the Lombard case and the convictions on charges of misleading investors of four company officials including two former ministers of justice including Sir Douglas. We believe this reinforces our claim that politicians are no more to be trusted than anyone else and one should downgrade one's assessment of a persons character upon learning that they are a knight or dame. These titles are a tactic, hundreds of years old, of allowing privileged people to get away with crime because the rank and file don't have the courage to accuse them. Understandably Britain retains them because of heritage values but they were prohibited early on in the USA and have been ditched in most commonwealth countries except NZ, possibly the most immature of these countries, has reinstated them.

A similar group of Lombard officials got into similar hot water around 2002. The problem was contributory mortgages that time. Sir Douglas was not involved at that stage but the former cabinet minister and CER champion Hon Hugh Templeton was. Mr Templeton had the sense to get out of that sort of activity after that but Sir Douglas boldly charged in to take over. We believe he knew of the corruption whereby officials including the judiciary were and are protecting Feltex officials from trouble and thought that he too would be covered if things went wrong. Well the protection has not extended to immunity from conviction but it might possibly keep him out of clink.

One has only to look at Tiketike Way in Wellinton to realise that it was a rather radical development. It is quite close to the city centre but nothing too special by way of sun and views. Apparently about six projects such as this made up Lombard's books. We are not at all happy about the name of this company,Lombard, either. It would seem to have been named after a long stating British insurance company which has been taken over. Whether the name has been discussed in the prospectuses we don't know but we believe it should have been. Picking on a famous name should not be lawful.

We now change topic.

Ms Joan Withers will no doubt be asked to do some promotion of the IPO of Mighty River Power, the state owned enterprise which she chairs, which is supposed to be launched quite soon. We would like to do for her a draft promotion of this IPO which she can release to news media and the public. Here goes:

Hello everybody. Boy have I got a deal for you! You will remember me from the 2004 Feltex Carpets IPO where I was dominant female director. Well its more of the same this time with the of Mighty River Power IPO, only this time we are into the billions.

Remember how in 2004 I was able to tell you "FELTEX HAS A LONG-STANDING AND SUCCESSFUL OPERATING HISTORY" well believe it or not I am able to tell you the same about Mighty River. Its all about churning out the product isn't it? That's what the investor wants to hear. They don't want to hear about the bank getting worried about its funds in Feltex a couple of years back and calling in a liquidation firm to give them a report on the situation. How boring that would be in a prospectus? Investors want to have fun. That problem was all fixed up anyway, with a $50m debenture, and the charming Feltex IPO investors were only too happy to pay back the debenture holder from their generous subscriptions.

I would like to now talk a bit about our phenomenal Market analysis at Feltex which of course I have insisted be applied at Mighty River. For instance this is the size data of the Australian Carpet Market in million square meters as supplied by the Carpet Institute for the years 1990 to 2003 respectively.

50.4 46.4 45.4 44.7 49.9 52.1 47.9 49.5 50.0 50.2 54.0 49.1 48.9 53.1

50.4 Now if you wanted to know what the last 10 years of such figures would predict the size for the year 2005 to be, the average mathematical idiot would type the ten years 1994 to 2003 in a column or row (say the column A1 to A10) on a Microsoft Excel spreadsheet, and alongside (say the column B1 to B10) would put the respective market size. Then in any other cell just key in the formulae supplied ie =FORECAST(2005,(B1:B10),(A1:A10)) and hit the Enter button to get 51.5 . This is 3% less than the 2003 figure of 53.1 so if that was all the information there was to go on these people would say Feltex should reduce their 2003 sales by 3% to get the best available forecast figure for 2005.

What a lot of drivel. Us experts at Feltex set the matter out at page 37 of the prospectus where we said that from 1993 to 2003 the market grew by 1.7% pa compounding. You can test that on an Excel spreadsheet by keying in =44.7*(1.017^10) . 1993 is not part of the last ten years you might say. But we work in intervals. How many posts does it take to construct a fence 10 meters long with posts one meter apart? 11of course. Otherwise how are you going to hold up the wire at position 0? And this way we only use two figures. Cut out the middlemen, that's us.

We are conservative people. We didn't use 1.7 pa increase to forecast market growth. Just 1%. And we claimed on page 92 "The size of the carpet market in New Zealand and Australia, measured by volume of linear metres sold, will grow over the projected period by approximately 1%, which is below the average growth rate over the past 10 years."

"volume of linear meters" is a good term isn't it? Keeps the investor thinking. Linear means you just add up length of each piece of carpet without having regard to how wide or deep it is.

We didn't spell out what has been happening to Feltex's market share in the years preceding the IPO. We mus'nt worry the potential investor must we. We just adopted a one percent increase in share for the purpose of our projection. We didn't actually mean an increase of 1% of the total market. Just a 1% in Feltex's sales due to an increase in market share. It sounded reasonable. We gave figures for market size, its asking a bit much to give figures for market share as well.

And then I must mention the great times we had in NZ following the IPO. The Athens Olympics came along and didn't we do well? People on bikes especially. A far cry from the 1 gold and 3 bronze in Sydney. Eion Edgar, now Sir Eion, was responsible for the build-up to Athens by the Olympic Committee. The firm which he chairs helped sell the IPO, and just for good measure he chaired the ACC investment committee which put $9m into the IPO. The other institutions were dunces for not ploughing funds into the great Feltex IPO investment. When I saw them not investing did I think we should can the IPO? No Sir!

The mixed ownership model as Mighty River will be is the way to go. My Colleague at Feltex, Tim Saunders, was also in the electricity sector but he was on the board of the private company Contact. They did not appreciate what we were doing at Feltex so they sent him down the road, to Cheviot or somewhere I think. Tim had been in South Africa under the apartheid regime along with Des our financial officer at Feltex and Kevin Simpkins the Securities Commission officer who inspected us. They all learned to present things to the Government's advantage over there. I got this training with the NZ Broadcasting Corporation I suppose. It was one of the first big state organisations not to be under State Services control I think. Its easier to please the politicians when you don't have a SS Commissioner interferring. Radio New Zealand Afternoons called me up recently to be their Business Ethics advisor. Understandable isn't it.

So roll up for the Mighty River IPO. If you see me fly as I did from Feltex you will know that thats it for your funds but in the meantime have a lot of fun.

end of draft

We wish now to refer to this article in Faifax publications about 12 December which tends to ridicule the continuation of of an action by about a quarter of subscribers to the 2004 Feltex IPO against liable parties to that fraudulent share issue. Sure the action is grinding through four years of "umpteen interlocutory battles" but that does not mean that the action is not extremely just. Those in charge of it are spinning it out on behalf of the fraudsters that implemented the IPO.

This article we refer to expresses surprise that the action is still going. We say it is aimed at reducing the expectations of those taking the action. The author is Marta Steeman This is the writer of the article who "summarised" the presentation of Kerry MacDonald to to a mining conference in November 2005. Mr MacDonald was then chairman of the then National Australia Bank subsidiary. the Bank of New Zealand and also chairman of the mining company Oceana Gold. Mr MacDonald decided to calculate the reduction of NZs exports per capita over 40 years since the boom time of the early 1950s when the country just happened to have the goods that the rich world wanted at the time giving the country almost the highest per capita income in the world. Well one could not expect this situation to last of course but Mr MacDonald wished to use the relative fall in export value to argue that the country had bad economic policies. The hope no doubt was that such policies would be changed to policies which best suited him. But the findings of that research was not convincing enough, he decided, so it seems he conspired with Ms Steeman for her to make an "unfortunate mistake" in a business page article in the Dominion Post so that instead of referring to the change in exports per capita over 40 years Ms Steeman said that this was the state of the country's exports per capita, full stop. She reported that "the country's {NZ's] exports per capita were almost half that of Australia and two and a half times less than that of the United States". In fact NZ's exports per capita were 25% greater than Australia and 75% greater than the United States. Mr MacDonald made no effort to correct it and the Dominion Post would not accept that the statement was wrong until Mr MacDonalds presentation was produced. The paper published this explanation as written by the press council but although they were required to correct, the true situation with respect to exports per capita was never given.

Ms Steeman now works in Christchurch, remaining on very shaky ground. Her support of the crooked element of the government/business sector is not acceptable.

Talking of this crooked sector we now wish to consider the females that are at the root of it. We do not suggest that females are more crooked than males. Far from it. We do say however that in the climate of the past 30 years females have a far far greater chance of getting away with crime than males. Males who criticise females have been severely penalised in terms of employment and the right to bring up children. Hence males have become cowards and seldom if ever do critise females and as a result spectacular female crime has arisen.

We intend setting out the structure of the crooked Feltex IPO for Olympic medals case.

The structure was obviously set up soon after Helen Clark gained power in late 1999. It is quite clear that it is a joint work of the two major political parties or elements of same. Obviously the portfolios of Commerce and Law have been involved. There have been some unexpected changes in these portfolios because no doubt it got rather too hot in the kitchen. The Law minister got sidelined into becoming the parliamentary speaker. Then when National came to power, the number 4 minister, Simon Power, was given both these portfolios and although in the prime of life he lasted only one term, leaving Parliament for a bank job.

The Commerce portfolio has now gone away down the list in the new line-up to No 19 and to a most controversial character in the circumstances. The new minister is one Craig Foss. A product of Naenae College Mr Foss was an officer of the Bank of New Zealand during the most disgusting ("extraordinary" is how the National Party express it) period in the Bank's history when this largely Government owned Bank lent profusely to contribute to the huge markets bubble and then had to be bailed out twice after the bubble burst. He was possibly managing the Bank's Singapore trading branch when the Bank invented a $100m profit for its 1990 year which this site has devoted much of its accusations to. So let's assume that he was not in on that. He was too close to it to expect to go unscathed though.

The 1990 BNZ scandal and its cover-up is not the biggest one handled by this site of course. It is the second biggest, and is well outdone by the 2004 share issue (IPO) of Feltex Carpets which was really a $250m robbery of amateur NZ investors. As we say above NZ's two major political parties were involved. The sole vendor (for 100% of the Coy), promoter, and some lead brokers for this issue were all obviously closely connected to the giant international bank Credit Suisse. Mr Foss's only other major period of employment from 1993 (when the BNZ was bought by National Australia Bank) was with this very bank.

Mr Foss was employed as a trader/risk manager by Credit Suisse, first in Europe then the Asia Pacific region from Tokyo. We don't know exactly when he left CS but he was elected an MP for National in Tukituki, Hawkes Bay in 2005. It seems likely he left CS around the time of the Feltex IPO. Perhaps that was his last sale as a trader. We suspect his political career was all arranged by CS to help ensure that no Feltex IPO robbers got into trouble.

We say that it is not acceptable that Mr Foss hold the commerce portfolio or anything related to it.

We have it in for the NZ Electoral Commission. It says that "It is clear from the Electoral Act 1993 that candidates for a party are those that were nominated by that party under Part 6, whose party name appeared on the ballot paper below those candidates' names pursuant to s 150(6)(d), and whose party logo appeared by the candidates' names pursuant to s 127(7)(d). "

What a lot of tommyrot. With respect to Part 6 the only reference to candidates that are for a party is in sec 143 (3A) where it says that candidates that are for a party can at their option have the party's logo against their name. But candidates that have a party logo against their name are unlikely to have got it there because they are for a party. Invariably they will have got the logo there uder sec 127(7) which we discuss below. Sec 150(6)(d) says that the name of the "political party of the constituency candidate", if any, shall be alongside the candidates name on the voting paper. But the "political party of the constituency candidate" can be quite a different thing from the "the party which the constituency candidate that is for". In the former case the party concerned is one the candidate belongs to, in the latter case it is the party favouring the candidate because of his/her qualities or circumstance, regardless of whether their is any other relationship between the two. Section 127(7) says that a party secretary may submit a logo to go alongside the name of "any constituency candidate of that party (if any)" . Again it is ""of" that party not "for" that party. There is a difference. They are of the party if they chose to stand for it, presumably with the party's permission. They are for that party if the party wishes them to win the constituency and assists them to do so.

It is clear that Peter Dunn and John Banks were candidates for the National Party in their respective constituencies because the National Party publicly stated that it wished them to win and it assisted them to do so. They are therefore "for that party" under sec 192 (2)(a) and so must be included in those MPs who make up that party's quota of MPs as determined by the party vote. The Commission knows full well the objective of the act is for the number of seats a part has to be determined by the party vote. There is no provision to get arround this by supporting some candidate other than your own knowing that that other candidate is likely to assist you but is not in your quota. If this were allowed MMP would not work but it is not allowed, as we have shown.

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