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November 2013 Edition

We think we better leave the Lundy issue alone now that a new trial has been ordered.

We will continue to comment on these controversial murder cases in general as they would seem to be a major cause of corruption in New Zealand.

We read on the internet of many strange occurrences with respect to the death of the South Canterbury financier Allan Hubbard. We think the death was just too convenient to be as the result of an accident. We wonder if and when a coroner’s report will be released. We would like to know who was in the helicopter when he died. Were they the regular operators? As a result of the government robbing investors with the “Feltex IPO” it became harder snd harder to handle a finance company and Mr Hubbard was in the trap.

We are amused at the case of one Guy Hallwright. He worked for Forsyth Barr, the crooked sharebroking firm chaired by the crook Eion Edgar who features most prominently on this site. Hallwright was on a salary of $275,000 apparently. He owned a flash car and was convicted of a serious road rage incident targeting another flash car owner and in fact run him over. As a result he lost his job with FB and he has been trying through the courts to get it back without success.

We like his argument that FB’s reputation was not harmed by him being so convicted as it had earlier been tarnished by their involvement in failed firms such as Hanover, South Canterbury Finance, Feltex Carpets and Credit Sails. We say he understated his case in this matter. We say the reputation of Forsyth Barr was not near as low as it should have been and he was doing the public a service by bringing the reputation closer to where it deserved to be. Forsyth Barr should have been struck off as a sharebroker for its involvement as a lead broker in the Feltex IPO and its executives and representatives, including Mr Hallwright jailed. They all had a duty to take a look at Feltex’s assumptions on which it based its projected 2005 results and it would only take a few minutes to find trouble. The calculation of the trend of the last 10 years of Australian market size to be 3.4% above the year 2003 size in 2005 on page 37 of the prospectus was sheer willful deceit which all these experts would be able to see. The trend of the size for the past 10 years in fact predicted 2005 to be 3% below the 2003 size, 5% or $16m of Feltex sales below what Feltex used. Then we have the 1% p.a. increase in sales due to increased market share which Feltex “thought” they could achieve when sales had been falling 5% p.a. due to a reduction in market share. This was crookedness personified but of course the Government, itself a pack of crooks, had effectively closed the Securities Commission and the SFO down so that this money could be raised to buy gold and silver medals at Athens, making us a scourge of the world.

The Feltex IPO swindle is a terrible criminal action committed by a whole series of hitherto respected politicians and professionals. There were for-runners of course. The 1990 Bank of New Zealand “profit” of $100m was obviously a jack-up ordered by the Government and opposition leaders of the day. It had the support of the rich professional leaders such as the law and accountants societies. He getting corrupt auditors like Elizabeth Hickey and Peter Garty to give the corrupt declaration approval was no trouble. Then eventually in 1993 the Securities Commission (with Ms Hickey a member) chimed in to say that nobody did anything wrong but the accounts work which gave rise to the profit was clearly wrong. Then a year or two before the Feltex IPO there was a small trial run when value (half a million)was stolen from the Accident Compensation Corporation’s large investment fund by way of “purchasing” dud shares, that of National Mail which was closing its prime business but the Corporation did not suspect this, if you want to believe it. The spoils went in the first instance to the vendor of the shares Cliff Cook but he probably promised to distribute some of it to where the Government wanted it.

We nominated the NZ Press Council as the body most charged with keeping the Government in check, ie obeying the law, with respect to the Feltex scandal, but we now think that that is only of external groups.

The Serious Fraud Office is the body that should have done the job of exposing the large and deadly Feltex IPO scandal and it should have done it very early in the piece. The SFO is charged with investigating complex and major fraud. The Feltex IPO fraud was not really complex but at $250m it was major. The IPO should have and would have been highly suspect from day 1. The reason why it was not stopped in its tracks is because the Director and other senior staff are/were corrupt. They accepted appointment on the basis that the Government would tell them who to prosecute and who not to prosecute. That would seem to be basis on which the SFO was set up separate from the police. But now the police seem to work on a similar basis.

The SFO could and should have stopped the IPO the day the prospectus was released because:

• It was suspicious because the vendor was exiting the company completely.
• It was suspicious because carpet manufacture was losing protection in Australia and NZ.
• It was suspicious because Feltex had taken over the Australian carpet manufacturing plants of Shaw Industries in the year 2000 but had not purchased any of Shaw’s brands. There was nothing to stop Shaw from re-entering the Australian (and NZ) market by way of importing carpet which it probably established was now a cheaper method of supply.
• Having established suspicion it could be observed that Feltex was expecting to increase sales by 1% from increasing its market share when it had been losing sales at the rate of 5% pa due to lost market share for the past 2 known years.
• Feltex claimed that a 1% pa increase in market size it had factored into it sales projections was less than the average growth over the past 10 years. On page 37 of the prospectus was a graph of the last 11 years of Australian carpet market size with a claim that the size had grown an average 1.7% pa compounding over that period. It could readily be established that only two years, the low 1993 year and the high 2003 year had been used in the 1.7% calculation. All of the 10 years needed to be used to predict the size of the 2005 year and that size prediction was 3% below the 2003 size not 2% above it as Feltex adopted. This was fraud.
• The fact that there was an association with Credit Suisse who had transacted the ACC purchase of defunct National Mail shares was also high grounds for suspicion.

The police could perhaps be excused for leaving cases like Feltex to the SFO but the situation changes when deaths or injury of people are involved. The related deaths we know about, both of young men, occurred in 2011. Paul Phillip Wilson would have been about 14 years of age when his mother, the marketing manager of Feltex Carpets must have been “expected” to agree to the grossly improper sales forecasts which went in the prospectus which we refer to above. She no doubt faced much “education” (as the Soviets would put it) by the state and it would be no surprise that this has rubbed off onto Paul. He has obviously suffered a personality disorder because his mother has understandably gone around the bend, and this disorder has resulted in his death in a road incident at Johnsonville, Wellington at Easter 2011. No coroner’s inquest or ruling has yet been held as far as we know. We have offered to give evidence but the coroners will not communicate with us. Coroners seem to have lost their independence in a revamp of the service a few years back. The police also will not communicate with us. We reported to our local station and handed in a written complaint. A non-uniformed officer took the complaint and gave a reference number but they will not comment further. We complained to the independent police complaints authority and on Pieter Roozendaal was more forthcoming and dismissed the validity of our complaint. We say it was his job to get the police to respond not to respond himself. If he can afford the time so can they.

The other death we know about is that of David Patric Gaynor, about June 2011. His father, an NZ Herald business journalist had been most critical of the Securities Commission’s treatment of the Feltex Carpets IPO (although he has we think, not directly suggested Government involvement nor financing of Olympic cheating) but he has received little support from other journalists or officials. This has left David, who went to the private business school out on a limb and no doubt subject to much taunting. The Chief Coroner has mentioned no such matters in his report.

We call on support from all quarters to get this matter straightened out.

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