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October 2015 Edition

NZ Superannuation Fund Annual Report

Well the NZ Superannuation Fund has released it annual report to 30 June 2015. Download it from here. The Fund’s investment in the Portuguese bank Banco Espinto Santo is mentioned here and there but the Fund mainly talks about achievements and highlights where of course the bank loan does not come into play.

We did not realize that the Fund’s Chief Investment Officer Matt Whineray who has been with it since 2008 got his grounding so to speak with Credit Suisse both in Hong Kong and in New Zealand. He was a vice President of CS believe it or not. He was quite probably associated with NZ Government minister the Hon Craig Foss during that time. He would have been with Credit Suisse when it represented the vendor Cliff Cook and the buyer ACC when ACC bought half a mil of near worthless National Mail stock just before NM announced that it was going out of the mail business. And was with Credit Suisse when some authorized associate sold for $250m near worthless Feltex Carpets shares in a fraudulent IPO.

Another NZ Superannuation Fund employee that comes to light is David Iverson the head of asset allocation. Having its assets all the right place is really the Funds only duty. He has been with the Fund since 2009. His name is in the 2015 annual report three times including in a personal profile but it was not in the 2014 annual report at all. Mr Iverson got his grounding with Goldman Sacks JB Weir with titles so grand one would wonder why he ended up with the Fund. This too big to fail” finance house has a low ethical rating.

So the NZ Superannuation has all the needed expertise for leaking funds.

Well what have they said about it in this 2015 annual report? It is virtually all contained in pages 82 and 83. In one place they talk about a “credit mandate” where the term “opportunistic” is used. It says that after deducting the loss they have made $900m from this mandate since 2009. The slight hint is that they were sure to suffer a loss from such activity sooner or later but overall the mandate had been good. There seems to been no talk about such a mandate in the previous annual report though. This suggests concepts are dredged up to “explain” happenings. Elsewhere it is suggested that the reserve bank of Portugal has most unexpectantly discriminated against them. The bank of course wanted to protect everyday citizen investors who put money with the bank because they needed put it somewhere and BES was thought to be as good as any. They were not interested in protecting deposits associated with the owners of the BES, the argument no doubt being that these owners had decided to go into the business and failed and that is the price you pay.

This last minute deposit including the Super Fund money, even if genuine, could be seen to be designed to prop up the BES shareholders. It kept it afloat for a very short period of time and so was wasted effort and could have been predicted to be so. It was nothing that the Portuguese Government or people need be thankful for. Of course this reserve bank promised protection to these investors it should honour it however. The test one would think would be whether the interest payable was consistent with the high risk of no guarantee or the low risk. No mention was made of the contracted interest rate. Another concept explaining this investment was that it was part of its “value-add” strategy or sector. It was just a bank deposit but the Fund could get a good rate because of the investment size and the Fund’s negotiation strategy. But if it had to pay Goldman Sachs and an insurance company it is hard to see that this could be the case.

Then independently the Fund says that it “simultaneously purchased credit protection to provide it with insurance against a default by BES”. It seems incredible that such insurance was available at an affordable rate but if it was given as that statement says, then make a claim, the money is not lost. But they don’t seem to be taking any action against an insurance company for insurance it has paid for, just against an offshoot of the Portuguese Reserve Bank for not taking over and honouring the terms of its deposit. Taking legal action or at least purporting to is a great way of stalling any investigations. And this insurance story is not believable.

Another concept explaining this investment was that it was part of its “value-add” strategy or sector. It was just a bank deposit but the Fund could get a good rate because of the investment size and the Fund’s negotiation strategy. But if it had to pay Goldman Sachs and an insurance company it is hard to see that this could be the case.

All explanations for this loss lack credibility. Clearly officers of the fund have catered to Government wishes be provided with money for Olympic cheating and/or other secret immoral causes, by making it appear that the Fund has “most unfortunately’ made an investment which has gone bad and funds have been lost. The system will have a low yield because all the parties involved will want their cut, but this no doubt is the way that a lot of corruption works.

Report into the Death of Paul Philip Wilson

The coroner Gordon Matenga of Hamilton we believe has produced an erroneous finding dated 22 September 2015 in the matter of the death of Paul Philip Wilson. Paul died in Fraser Avenue Johnsonville Wellinton NZ in the early hours of 24 Aprill 2011.

It should be possible to obtain a copy of this report from the Hamilton Coroner’s office.

We have previously twice complained about the non-production of a report into Paul’s death. We now complain about invalid findings contained in the eventual report.

Section 57(2)(d) of the coroners of the Coroners Act 2006, as quoted at paragraph 30 of the finding, requires the coroner conducting an inquiry to establish the causes of death so far as this is possible.

In his paragraph 33 Coroner Matenga says that in his view the investigated circumstances of Paul’s death "should be limited to the events of the evening 23 April". This is only a period of about 12 hours. He says to look back further would be "too far removed from the events of 24 April 2011". There are very many instances where the cause of death is an event, of short or long duration, which ends perhaps many years before the actual time of death. Many such events are of wilful criminal activity such as sexual grooming or grooming young people to join unjustified foreign war efforts as have come to attention recently. All such possibilities which may have caused Paul Wilson’s death go undetected if the coroner is only prepared to look back 12 hours or so. In particular young people with physiological injury tend to live on many years until they have the freedom to kill themselves with the help of booze, either by direct self infliction or complete gay abandon behaviour as this case appears to be.

It is a matter of finding meaningful causes of death and these cannot be easily be defined but can readily be recognised. An absolute cause of death is being born. But generally this has no relevance. But it is not just premature death we should be concerned about. An 100 year old has a right to be as safe as practicable. Also one’s head impacting with parts of a car has little relevance except when considering the safety of different vehicles. Likewise being drunk and drugged is not very relevant. It is known and inevitable that people in that state have a high possibility of death one way or another. What has caused people to get in a drunken state is far more relevant. And this often involves physiological damage caused long ago.

We claim that the coroner has used this close cut off point to avoid considering the likely cause of death which I had provided him and Coroner Smith with, because the Government, which appointed him, is directly responsible for Paul’s ill health and consequent death. Indeed we believe Coroner Matenga has been appointed because he has promised or demonstrated a willingness to hide Government misconduct. Coroner Smith we think has been appointed under the old system and has given no such undertaking and has been much troubled by a request to cover up the cause of death. He has delayed action and when we have drawn his attention to undue delay the dilemma has killed him within a few days.

Blaming deaths on alcohol and/or drugs is not acceptable because (A) we have to live with these drugs being in society so it is important that children are brought up carefully to ensure that they have no physiological injury which will make them apt to abuse these drugs as and when they get access to them and (B) these damaged people would still suffer and perhaps suffer more if their access to drink and drugs was able to be effectively curtailed.

Although officially the coroner’s investigation only goes back 12 hours the report does give a few insights of earlier times.

Pauls antisocial behaviour had been worse than we had anticipated in that he had until a week or two before his death been serving a sentence of home detention at his mothers home in Auckland. No details of the nature of offending or length of sentence are given. It is we think likely that prior to serving the sentence he had been living in Wellington and the offending occurred there. His girlfriend appeared to reside there and paragraph 29 contains the phrase "when he [Paul] moved back to Wellington". Paul’s mother operated a restaurant in Auckland during Paul’s detention and it can be inferred that Paul’s father did not at that time live with her. No mention is made of Paul’s father which I think is another deficiency of the report.

It is inconceivable that there would be two people with the distinctive name of Paul’s mother in Auckland and hence we say that Paul’s mother was General Manager, Commercial Sales and Marketing, of Feltex Carpets Limited in April 2004 when a prospectus document said that she was aged 43 years and had 16 years experience in sales and marketing roles with the company. This situation should have put Paul, then aged 14, in a most favourable position for a business or professional career. But Feltex grossly overstated its sales prospects in that prospectus and although the share issue was highly "successful" with nearly all $250m of shares sold to mainly Mum and Dad investors the company faltered soon after guarantee provisions became void and it went into liquidation about two years after the share issue with all share capital lost. It is obvious that this share sale of all the company’s shares was a prearranged robbery of amateur investors by the Government with Australian Government support to finance cheating of gold and silver medals to NZ athletes at the 2004 Athens Olympic games. Corrupt judiciary officers and commercial regulators were put in place in early 2004 to ensure that such corruption was got away with. NZ cut its ties with the (British) privy council at the start of 2004 and a NZ Supreme Court commenced jurisdiction then.

We say that Paul’s mother was "stunned" by this bold misrepresentation of the company’s sales prospects and this situation has most adversely rubbed off into the mental abilities of her son. Possibly there was no father present to add balance. The Company collapse was accompanied by tons of criticism which marketing staff would be at the centre of, but no official action.

This graph and statement from page 37 of the prospectus relates to Australian Carpet market sizes for the 11 years up until 2003. The 1.7 % calculation takes only the sizes of two of those years, 1993 and 2003, into account. Using the trend sizes of all ten years 1994 to 2003 a drop for 3% from 2003 to 2005 is predicted, not the 3.4% increase that Feltex has "calculated" nor the 2% increase that it has adopted for financial projections. With respect to market share Feltex had been losing share at the rate of 5% of sales but without justification predicted that this would turn around to a 1% increase from then on. There was no such turnaround and hence the liquidation.

Arguably the judiciary and commercial regulators are only corrupt as regards raising funds for sport cheating and they arrange compensation for adults vulnerable to the effects of their robberies. But they have not taken the effects on young people into calculation. Nor can they reverse the damage caused. We have previously complained about the then chief coroner’s report into the death of David Patrick Gaynor. David’s father wrote an article most critical of the (now) late Craig Norgate in May 2010. (The criticism involved a bad prospectus which was not acted upon similar to the Feltex situation). This no doubt was a strategy so that it could not be said that the matters concerned were not looked into. Mr Norgate was no doubt aware that such criticism was coming and there was no official reaction to the article as no doubt was arranged. But no reaction would not apply to senior pupils at Kings college where David and a daughter of Mr Norgate were in year 12. Mr Norgate was no doubt something of a role model as a former CEO of NZ’s largest company and as Mr Gaynor’s article received no official support, David no doubt was in the firing line. He drove himself some distance to school each day, no doubt to keep out of earshot of fellow pupils. He took prearranged alcohol and an illicit drug prior to attending out of obligation a function hosted by Mr Norgate in July 2011. He told his date he was drunk prior to the arranged collecting of her and she went to the function independently. Within four or five hours David had died of self harm. He had got himself in some trouble with his school, no doubt as a decoy so his father would be less troubled, which he cited as a reason for his death and which the Chief Coroner "swallowed". The Chief Coroner did not mention the 2010 article in his report even although nothing could be more relevant.

Both these reports have erroneously and wilfully given alcohol and drugs as the cause of death. The main difference is the report on David was out in about 2 months whereas Paul’s took about 52 months.

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