To view our conclusive evidence that the Feltex IPO was instigated by the major political parties to rob investors to finance cheating of Olympic medals click hereWe have revised our presentation of this evidence mid October 2014
December 2014 Edition
We thought we would take a look at the Accident Compensation Corporation governance particularly in relation to investment care and we did not like what we saw. ACC currently has 8 directors, four of each gender with a female in the chair. This does not reflect the gender balance of a typical business board we would observe. The annual report no longer gives a photo and business connections of these members but the web site does so still. Trevor Janes is deputy chair. He has been around for a long time and was a board member and its Investment committee chair in the 2000-2002 era when it bought half a million of National Mail shares even although this company, which boldly took on NZ Post for a share of the mail business, had not reported for some time. ACC bought the shares from Cliff Cook who was a close associate of Peter Fitzsimmonds who was on the National Mail board so was likely to know what was going on with National Mail. ACC should have known of this connection. A week or so later National Mail said it was exiting the postal business and its shares lost about 95% of their value. We say this was not an unfortunate loss on National Mail shares but a willful highly illegal gift to Cliff Cook with whom there was perhaps an understanding that the funds would be applied in a certain way. ACC used to use various brokers for it deals and the broker on this occasion was either C S First Boston or Credit Suisse F B. Cliff Cook’s broker was the other of these two “firms”. What independence is that?
Trevor Janes exited the ACC board to make way for Eion Edgar. Mr (as he then was) Edgar chaired the Investment committee and the ACC made a $9m “subscription” to the May 2004 Feltex IPO which was being “sold” by the firm he chaired, Forsyth Barr. He also chaired the NZ Olympic committee at that time. We say this subscription also was a gift because the Feltex business was no longer a viable proposition. We say a significant part of this gift went to fund cheating to “win” country gold and silver medals at the August 2004 Olympic games. Feltex Carpets was sold by, and the sale promoted by, companies using the Credit Suisse name, no doubt with the permission of the giant Swiss company. The two brokerage entities mentioned above, C S First Boston and Credit Suisse F B are also subsidiaries or close associates of Credit Suisse. Sometimes these entities have been collectively known as Credit Suisse First Boston. That was when they thought they could get away without Chinese walls no doubt. These people could not be trusted to operate any Chinese wall.
Trevor Janes returned to the ACC investment committee without rejoining the board for some time. This procedure has not received the publicity which its significance requires. ACC now has two other non-board-member members on it Investment committee, both fairly long in the tooth and their background is of most concern to us and should be to everyone else as well.
Mr Janes was a director of the failed company Capital + Merchant Finance. Three of his fellow directors of this company got considerable jail sentences over the causes of the collapse but Mr Janes “was not on the SFO’s nor the FMA’s radar”. Presumably he didn’t have the mental capacity to detect that anything improper was going on. That’s the sort of skill that makes one ACC deputy chairman.
Patrick Duignan we discover has been on the ACC Investment Committee without being an ACC director for yonks. A former position held by Mr Duignan is “Director in the Investment Banking Division of CS First Boston NZ Limited”. We believe he is likely to have been there when the National Mail “trade” with ACC went on. We are certain this trade was known to be stealing. We don’t think he is a suitable person to hold this position with ACC.
Stephen Greenwood joined the ACC,s Investment Committee without being an ACC director in January 2011. For nine years, from 1986 to 1995 Mr Greenwood worked for Fay Richwhite as Senior Executive Corporate Finance. Fay Richwhite involved itself in many controversial practices during that time. It set up a public company Capital Markets which seemed to hold its dud projects once it was known that they were dud and the company eventually failed. This company had an interest in the Bank of New Zealand from 1988 and was involved in its $100m fake profit in 1990. We say this person too is not suitable for his ACC position. Interestingly Craig Foss who has been Associate ACC minister and Commerce minister in recent time has held employment with the Bank of New Zealand and Credit Suisse at times relevant to events mentioned above. Mr Foss has lost these portfolios and has been dropped from cabinet but funny enough the Commerce portfolio has gone to a minister ranked even lower than Mr Foss. Tony Gavigan the man who “of his own initiative(he would claim)” helps disgruntled shareholders, such as those in Feltex Carpets, take cases to court at their considerable expense but never achieves anything for them, is also a former Fay Richwhite executive.
The Financial Markets Authority was set up with a one third female structure but this has now drifted to half female, as its predecessor the Securities Commission, which found nothing wrong with the Feltex IPO because it didn’t look, used to be.
New Topic: Shareholders Assn and Joan Withers
We wish to condemn absolutely the Shareholders Association (who ever they are these days) in purporting at least to honour Joan Withers by making her the recipient of its “beacon” award. In doing so we equally or more so condemn Joan Withers.
Joan Withers came from Manchester and worked her way up through the NZ Broadcasting Corporation hierarchy and politicians we suspect saw “merit” in her because she tended to do what they wanted, good or bad, which the politicians did not want the public to know about, rather than her following official instructions as set out in statutes and regulations. Anyway much of the NZBC got sold to the private sector and her time there came to an end. She then picked up a range of company directorships.
Then in the year 2004 Ms Withers got herself mixed up in the “Feltex IPO” mass robbery and murder by way of her continuing policy of currying favour by assisting senior politicians regardless. This robbery/murder was initiated by the senior Government and Opposition leaders of the day to enable the country to finance cheating gold and silver medals at the then forthcoming Athens Olympic Games and perhaps subsequent summer games. Ms Withers action was to accept appointment as the only female director of Feltex Carpets just days before the issue of the IPO. It should have been obvious to her that the projected revenue of the company was overstated by 10% and the collapse of the company with near complete loss of shareholder funds was inevitable. In joining the Feltex board Ms Withers sought to maximize the amount of “subscription” money stolen from females and females in partnership. We say no female “director” (that is what she really wasn’t and isn’t) has done more in penalizing aspiring NZ business women. Decent, hardworking, honest people (to borrow a judges recent expression) fell to her guile. A year later when Feltex started to concede that it was failing as it inevitably had to, Ms Withers up and quit the company without out so much as a “sorry to have let you down”.. She had been appointed by sportsman David Kirk to be Chief Executive of Fairfax Media in New Zealand with instruction to severely reduce the staff of this major news organization. This gave her the opportunity to purge any staff demonstrating any independence streak which might sway the organization to uncover to any extent the Feltex robbery/murder and associated Olympic cheating. While she was on the Board of Feltex, Withers was also on the board of Auckland Airport. Her contract with Fairfax apparently allowed her to retain a directorship and she chose the Airport. She could not care a toss about fighting for the beleaguered highly female Feltex shareholders. She had contempt for them.
The Shareholders Association had claimed to have taken up the cause of Feltex subscribers. We attended a public meeting it held at Ellerslie racecourse on this subject. As we recall the Association put some sort of 5 year ban on the Feltex directors. But its then leader Bruce Sheppard has dropped the cause by joining the Financial Markets Authority. This authority took over from the Securities Commission including the commission’s web site but it then purged all Securities Commission’s public documents, dating back to about 1985, from this and any other web site it might have. This is the FMA’s idea of transparency we suppose. But transparency is not about hiding the murk. The FMA will have nothing to say about the Feltex IPO or anything that happened in that era. The “let’s put all this behind us and start again” philosophy spells corruption.
The State controlled electricity generating “companies” of which Withers is chair of one are unnatural creatures created by Government. It is claimed that they act like companies but they don’t. They naturally favour the personal preferences of those in government who are controlling the “companies”. The public sector has strict rules on giving everyone a fair opportunity to contract with it. But these large electricity concerns are not subject to that. A shareholding in them is at the whim of Government officials and the Shareholders Association should be frowning upon it. It is not shareholding as such. We are suspicious of how these electricity corporations sell off their doubtful debts for instance. We think they probably go cheap to official’s mates. The collector then seems to be able no whop on a huge collection fee to the accounts which there seems to be no controls on. Bad debts should be a cost borne by all electricity proportionally. Slow payers should bear the extra costs they are responsible for but not a greater share of the bad debts.
Withers “company” Mighty River Power sponsors the NZ rowing team. This team topped the medal table at the last world championships. Rowing is a sport where stamina plays a big part and hence winning can easily be facilitated by a wide range of drugs. Cambridge on the mighty river is oft referred to as the country’s drug capital. About the only way to detect such cheating is investigating top performances. Governments seem desperate to get championship medals because that is what the people are conditioned to want. There is no reason to think NZ is more able at sport than any other country with a similar race of people. Mighty River should not be engaged in such controversial activity. This is another case of the Government being involved indirectly in something (ie extra uncontrolled funds for rowers) that it would not do directly, with probably the Mighty River chair being the intermediary.
There is no place for such a person being a beacon. It is time she went away for a long spell.
We are interested in the structure of a report released by the “Inspector-General of Security and Intelligence” one Cheryl Gwyn on the alleged release of classified SIS documents for nation party gain. This seems to follow the structure of “Report of Enquiry into certain arrangements undertaken by the Bank of New Zealand in March 1988” issued by the Securities Commission in 1993”. This report is discussed at length on this site.
Ms Gwyn has the title and legal authority to investigate such issues and issue such reports except of course she needs to be able to criticize or even condemn, if appropriate, the people who have appointed her which is a tough ask. What seems to have happened in both cases is that the bulk of the report is devoted the establishing the facts and a reasonable or good job is made of this. On top of this the person /people issuing the report present their conclusions. The conclusions seem to be the prerogative of the author(s) and apparently do not need to be in accord with the facts which they have espoused. We thus get the situation where the Prime Ministers say eg Key and Bolger, quote from the “conclusions” which generally say that no evidence was found of anything corrupt while their critics quote from the “facts” section which generally indicates something rather different.
With regard to the BNZ enquiry however the news media however were quite selective in their quotation of and interpretation of the “facts” section. In particular disgusting behaviour of the Auditors, Elizabeth Hickey and Peter Garty of Ernst and Young went unchallenged. The media have continued to be obedient to the Government as required and the Feltex IPO etc has resulted.
We have found some documents of Hunter Hall which would indicate that they did in fact suffer a loss from investing in Feltex Carpets. They bought in early June 2004 at the issue price of $1.70 they say and sold about a year later for between 40 and 50 cents. This suggests that they did not subscribe directly and we are not sure that a sale has been recorded at that time for such an amount.
The amount in their
“Global Value” company as at 30 June 2004 was $A4.76m (say $NZ8m) but that is away short of the $39m quoted in Houghton v Saunders. Perhaps some other Hunter Hall companies also “invested”. Their reference to a loss is to be found at
their 2005 report
We have found this NZ Herald news item telling of Hunter Hall Investment Management taking a 9% “slice” of Feltex. The information apparently “emerged” on Tuesday 1st June 2004. But where it actually emerged from the brief article does not say. It would seem not to be from the company share register because two months later when the register was analysed for the purpose of putting information in Feltex’s annual report to 30 June 2004 this information is not there. The shareholding of Australians is said to be less than 1% as is shareholdings held outside New Zealand and Australia. Presumable this shareholding has been concealed in a number of NZ registered nominee companies because, it would seem, the holder of the shares is not very happy with its “investment”. Nor should it be. Carpet is rather labour intensive and tariffs were being lifted. And those with a bit of knowledge would know that Feltex had taken over Shaw’s Australian plants and not Shaw’s brands because Shaw had probably decided that it was now cheaper for it to supply the Australian market by way of overseas manufacture.
Well that is the generally observable reasons why Feltex was a suspicious investment prospect. But if one is thinking of investing millions into a company it is only appropriate to spend a thousand or two to put a calculator or spreadsheet over recent documents of the company to check their mathematical validity. It would become obvious that talk of 1.7% growth on page 37 of the prospectus was an irrelevance designed to mislead investors as was the untrue inference on page 91 that the 1% market growth assumed for projections of year 2005 results was less than what the trend of sizes of the last 10 known years predicted. Hunter Hall should have known that and whatever its reason for investing one would not expect it to be proud of its action.
> We still think Hunter Hall has agreed under “encouragement” or duress from the Australian Government to so “subscribe” to Feltex so Feltex shares can when necessary be “seen” to have been taken by both professional and amateur investors. An alternative explanation is that the managing director of Hunter Hall has been known to be a num skull and the Feltex lead brokers have persisted to get a subscription. It seems to be true that Hunter Hall has subsequently taken a substantial interest in the New Zealand company NZ Farming Systems Uruguay. It lost about half its funds. We know of no successful investments in NZ companies by Hunter Hall. NZFSU seemed an exciting initiative but apparently Uruguay has more intensive droughts than NZ and so the NZ systems don’t really work. The agricultural economist Keith Woodford says that some unfortunate arrogance by some New Zealanders seemed to be at play here. No doubt this is in part caused by the trumped up Olympic Gold Medals tally of NZ. It seems that Craig Norgate’s activities get “protection” from the NZ Government and perhaps the Australian Government, similar to that extended to the Feltex IPO.
It is a little surprising that this NZ Herald article referred to above is still on the net as an independent record after 10 years. It says that trading in Feltex shares is about to commence but this is all the news. The title is quite appropriate but one would expect that a few of the next largest shareholdings would be mentioned.
> Tasmania, Australia’s island state, has a population of just over half a million, about one eighth on that of NZ. The head of New Zealand’s Serious Fraud Office, Julie Read, lived in Tasmania all her life until taking up this NZ position a year or so ago. Tasmania is not exactly where one would expect to clock up the broad experience desirable for NZ’s SFO job. Ms Read had worked for the Australian Securities and Investment Commission (ASIC) since early this century and from about 2006 was the country’s appointment to a committee of the International Organisation of Securities Commissions. At this time the chair of this organization was her countrywoman Jane Diplock who got this job by “virtue” of being chair of the effectively defunct NZ Securities Commission and was flying the world on behalf of the international organization to fill in the time. We believe her connection with Ms Diplock, and both being prepared to ignore fraud when they believe that is what their effective employer wants, is what has got the Ms Read the NZ job. But the SFO does not do the work done in Australia by the ASIC we think. That is done or supposed to be done by the Financial Markets Authority, the successor of the Securities Commission. And of course the less than serious fraud is handled by the police. Australia has very few females on its ASIS a no other country seems to take Australian females for its top jobs. Why have we got to have them?
> Our suspicions about Tasmania heightened with knowledge that Hunter Hall director, mathematics graduate and former New Zealander, Naomi Edwards lives there. Apparently she moved there from Sydney to improve the health of her then partner. She lives in the same village as Australian Green Party leader Bob Brown for who’s party she does a lot of work. So her residence there seems fairly logical. But we believe that as an actuary she should have exposed the Feltex’s overstatement of assumed 2005 revenue on behalf of Hunter Hall. We are uncomfortable with this Tasmanian connection.
> We think some deal was done for Hunter Hall to say they invested.