Promotion of Accounting Reform as the most effective Pathway to a Fairer Safer and more Prosperous Society. Comment and Support from all quarters is Sought to straighten out NZ's problem
Complete Revamp done March 2015 reorganising to start with the nub of the matter followed by consequential issues and the background in which it took place.
The Government (Labour and National parties) backed Feltex IPO Robbery
Index
1 previous corrupt joint party deals 2 Dismay at Sydney Olympic showing 3 lower carpet tariffs 4 IPO for entire shareholding 6 Feltex changed by buying Shaw's Aust plant7 ACC involvement8 Eion Edgar involvement 9 Eion Edgar involvement10 Joan Withers involvement 11 Securities Commission quorum12 Feltex difficulties in 2002 13 Helen Clark involvement 14 Athens wins 15 Shareholders Assn - Sheppard 16 Feltex Shareholders' action 17 other people involved 18 5 directors charged & acquitted for subsequent events 19 Labour and National involved 20 Edgar's market fiddle21 Fairfax deliberately vague 22 Australian connection 23 Labour Govt particularly responsible 24 A serious crime 25 NZ 2012 Olympic performance26 Edgar "honours" 27 FMA cover-up behaviour 28 Crime responsible for 2 deaths at least 29 Commerce $ Justice ministers 30 Ernst & Young involvement 31 judiciary universally corrupt we think
We present herewith evidence proving the 2004 "Feltex IPO robbery for Olympic medals" scandal. The scandal involves both major NZ political parties. This time we will try to present the evidence somewhat in the a What is wrong ie corrupt b consequential happenings c How it came about.
a
1 Collusion between the National and Labour parties to delude the public has no doubt been going on for some time. It is legal in wartime and during a state of emergency. But the 1990 creation of a $100m profit for the Bank of New Zealand (BNZ) when there really was not any profit was certainly not permitted. Sir Ron Brierley had been appointed chairman of the Bank by Roger Douglas about 1985 and hi-jinks commenced soon after. NZ had one of the highest stock market bubbles in the world before the prices came crashing down in October 1987, with lending by the BNZ playing a significant part in it. The bank had to be bailed out by the best part of $1b in its 1989 year and the expectation no doubt was that it would rapidly return to profitability after that. Not much effort seemed to go into recovering the "bad" loans. Anyway the Australian property market was very slow in succumbing to the 87 crash and the BNZ had a quite high exposure to it. So with the "help" of its auditors, Ernst and Young, the BNZ decided to misallocate revenue (between financial years)from two huge parcels of zero coupon bonds which it held, to produce the $100m profit for 1990. It was obvious that another bail out was needed at the time the fake 1990 accounts were released but an election was coming up. Kim Hill of Radio New Zealand makes a big thing of the Labour MP (we forget who) whose job it was to explain to the incoming Prime Minister Jim Bolger after his election that a further bail out of the bank was needed. We believe this story was a deliberate jack up. The National Party and Mr Bolger would have many friends in the BNZ hierarchy including the high profile Sir Michael Fay who like Mr Bolger had Roman Catholic connections. It is certain that Sir Michael would have checked out that National would bail out the bank the second time. Keeping the second failure secret until after the election probably saved quite a few Labour MPs their seats.
Anyway the jacked up 1990 BNZ profit was exposed by the MP Winston Peters in 1992. The Government appointed Securities Commission, chaired by Christchurch QC Peter McKenzie released a report of an "enquiry" into the matter in May 1993. This found unequivocally that the $100m was wrong but nevertheless "found" that nobody had conducted themselves improperly in achieving that false profit. Elizabeth Hickey who supervised the 1990 BNZ audit was a member of the Securities Commission in 1993 but this fact was not mentioned in the report. Ms Hickey falsely OKed the misallocation of income from two large parcels of zero coupon bonds to increase in 1990 revenue, in the audit notes. These happenings no doubt confirmed that corrupt Securities Commissions and similar bodies could be used to further the joint objectives of the two main parties. With the coming of the Mixed Member proportional voting system in 1996 these two parties had more objectives in common.
to top of page 2 There was public dismay that NZ had won only one gold (and three bronzes) at the Sydney Olympics despite perhaps having the largest team per capita. The Government had been funding prospective medal winners quite extensively. Presumably it believed it had a public mandate for this and that a good Olympic record was good for the electoral popularity of the major political parties. There was a "need" to look for more cost effective ways of winning some medals. Appropriation of Public funds for cheating was probably not feasible. Australia was doing much better in winning medals.
to top of page 3 The other observation to be made before the IPO was released was the commitment of both Australia and New Zealand to trade liberalisation. Because both countries had relatively high labour costs it could be anticipated that industries with a high labour content would fare less well in these countries and in some cases would close. Feltex, originally an NZ domiciled company, had established markets in Australia through the CER agreement between the two countries but had been protected from competition from carpet manufactured outside the two countries. This protection had been diminishing. NZ companies had had some advantage in supplying wool carpet to the Australasian market because NZ but not Australia produces carpet wool. But not everyone wants woolen carpet.
to top of page 4 In April 2004 Feltex Carpets launched a public offer for its entire shareholding. When the vendor does not want any further involvement in an enterprise that is grounds for extreme caution as media commentators were keen to point out at a later date. However various institutions did say the prospectus did not stack up and that they would not be subscribing.
to top of page 6 It was readily observable to anyone reading the Fetex Carpets IPO prospectus that while under "Investment Features" it talked about Feltex having a long established and successful operating history this largely excluded the four years since it had taken over the Australian manufacturing plants of the world's largest carpet manufacturer Shaw Industries. The likely reason was that Shaws now found that it was more economic to supply the Australasian market by way of overseas manufacture. Feltex seemed not to have taken over any of Shaw's brands. While it had an agreement with Shaws in respect to technical support this seemed not to extend to any restraint of trade by Shaws, ie Shaws was free to compete. Since the merger Feltex reported falling sales and limited profitability.
to top of page 7 Eion Edgar was appointed to the board of the Accident Compensation Corporation and chairman of its Investment Committee in Nov 2002, apparently for a 3 year term. The ACC was virtually the only NZ institution to subscribe to the Feltex IPO and did so to the tune of $9m. Around the year 2000 the ACC bought National Mail shares about a week before that company went out of business losing ACC $0.5m . The vendor was a close associate of a director of National Mail. The broker for the both parties was Credit Suisse First Boston, using different names ie Credit Suisse F B and C S First Boston. This firm is associated with the vendor, promoter and a joint lead broker, of the Feltex IPO.
to top of page 8 Eion Edgar was elected chairman of the New Zealand Olympic Committee about 2003. He was chairman of the other Feltex joint lead broker, Forsyth Barr, at that time. He resigned as chairman of Forsyth Barr soon after the Feltex IPO and then resumed the position, which he still holds, soon after Feltex collapsed.
to top of page 9 Eion Edgar received a high NZ honour about 2003.
to top of page 10 Joan Withers was appointed to the Feltex board just days before the IPO was released, to become the company's only female director. It could be anticipated that a female director would appeal to "Mum and Dad" investors. Soon after Feltex's profit down- grade announcement in 2005 Ms Withers resigned from Feltex and the remainder of her considerable portfolio of directorates (except the Auckland Airport one) to take up an executive position at Fairfax. She was responsible for purging the staff at this news company in a restructuring exercise. The person who appointed her, former All Black captain David Kirk, subsequently was appointed to the board of Forsyth Barr. Ms Withers had previously held a top executive job at the Radio Network but for no obvious reason that job had come to an end. It is rather unusual for a director of a good range of companies to want to become an executive again. She has expressed little remorse for deserting the Feltex subscribers in their hour of need. She could no doubt have quit Auckland Airport Co instead of Feltex. The subscribers to the Feltex IPO had a right to think that she would stay with them longer than she did. The logical answer is that the Fairfax appointment was a jack-up to get her out of Feltex and get rid of anyone in Fairfax who might expose the scam. When she eventually left Fairfax senior appointments to Government Boards were made available to her. She now, July 2014 chairs Mighty River Power and is deputy chair of TVNZ, both Government controlled organisations. She has left Auckland Airport after chairing it for some time. She has joined the New Zealand board of the ANZ bank. This bank funded Feltex Carpets and apparently is still owed a little bit. Probably it was in on the Olympic medals act given its Australian connections. Chair of this bank's NZ board is John Judge who was CEO of Ernst and Young for some time prior to doing a stint as chair of the ACC, getting into a bit of a tangle. Being on the board of a wholly owned subsidiary can be a piece of cake. You just do what the owner says except you are responsible to ensure the company does nothing unlawful. Mighty River Power sponsors NZ's highly successful (or "successful") rowing squad.
to top of page 11 The Securities Commission quorum which purported to investigate the Feltex IPO consisted of four members, all female. The Commission at that time had a total of 10 members, 5 of each gender, as was the case in April 2011 when it closes down to be replaced by the newly established Financial Markets Authority, which started off with three female members out of a total of nine members. The chairperson of the Commission, Jane Diplock, was on the quorum ruling on the Feltex IPO. She is from Australia as was one other quorum member, Keitha Dunstan. She had been given a position at Victoria University of Wellington, but like Diplock has now returned to Australia, their foul deeds done. Another member of the quorum, Joanna Perry, is also no longer on the Commission. She had followed Elizabeth Hickey in becoming chair of the Financial Reporting Standards Board. Elizabeth Hickey of course made two "unfortunate mistakes" as auditor to allow the Bank of New Zealand to report a $100m profit for 1990 when the profit was less than $35m. We refer to this in item 1. In 2010 Ms Perry was made a member of the NZ Order of Merit for her services to accounting. Ms Hickey got a similar honour but for services to netball. The fourth member of the Securities Commission quorum which "investigated" the Feltex IPO was Annabel Cotton. The Australian Securities and Exchange Commission has 7 members one of which is female.
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12 Feltex Carpets was in financial difficulties with its bank in the years 2001 and 2002. It got a $50m debenture loan from someone to relieve the condition. The debenture was repaid from the "IPO" raid funds and the indications are that it was agreed that this would happen when the loan was given. Evidence of Mr Fulton of Ernst and Young and Mr Nichol of McGrath Nichol supports this.
to top of page 13 Female Prime Minister Helen Clark's Labour party had won its second parliamentary election in late 2002 and in 2004 would be preparing for a hoped third win in 2005. Stacking the Securities Commission with people of "like mind" or prepared to be for due reward is likely to have been part of the strategy. "Dr" Mary Ann Thompson who became acting head of Helen Clark's prime minister's department and was said to have the ear of the prime minister was subsequently convicted of claiming to hold a Phd when she did not do so. This Prime Minister with certain of her ministers is likely to have been responsible for the four female Securities Commission for Feltex and for female judges presiding over the two Feltex Court cases.
to top of page 14 NZ scored some "astounding " wins at the Athens Olympics, much of them centered around cycling, which is well recognised as having a drug cheating problem. Ms Ulmer won by 2 seconds and there was the unusual sight of her being held on her bike while she agonisingly recovered her breathing. The event she won is no longer an Olympic event. It is probable that a secret branch of the Olympic Committee has a facility whereby a country buys an exemption from genuine drug or similar testing for certain events. It helps keep everybody happy no doubt. Corruption is not new to this organisation. Tyler Hamilton of USA has in May 2011 handed in his gold medal for cycling at Athens in 2004, confessing we think to EPO use. Lance Armstrong was at his prime about that time but his "achievements" have all been discredited. He has been stripped of his seven Tour de France titles. About the same time Ms Ulmer has been appointed a cycleways ambassador. Prime Minister John Key has in 2012 chosen her to be a guest on his radio show.
to top of page 15 During the Feltex collapse the Shareholders Assn under Bruce Sheppard made a big noise and took token action against the directors but Mr Sheppard then changed tack and was apparently instrumental in getting MacDonald Vague appointed as liquidators. These liquidators purported to spend a lot of public money investigating the IPO but found nothing wrong "out of respect for the Securities Commission". They were suing the directors for matters other than the faults the Commission found (as well as those faults) but strangely enough also only for things that happened after Ms Withers left. Their action has now been settled with minimal benefit obtained. The liquidators refused to give access to the share register to a member of the public despite an obligation to do so.
The liquidators have however now taken action against the Feltex auditors, Ernst and Young, concerning the 2005/2006 accounts. The judgment in MED V Feeney found fault with the auditors but they were not a party charged in this case.
to top of page 16 Tony Gavigan lead a shareholders action against those responsible for the IPO. He kept changing witnesses and legal people. His action was consistent with channeling shareholder energies into a losing action, as an agent of the instigators of the IPO. He is a former Fay Richwhite executive. A first hearing under Justice Dobson at the Wellington High Court. A verdict making no award was released in September 2014. An Australian accountant, Greg Meredith, gave evidence at this hearing saying that he thought an allowance for a 1% p.a. increase in Australian caret market size over that for year 2003 was reasonable. He appeared to be considering the growth from various starting years to the 2003 size. He did not appear to have used regression analysis to predict the 2005 size and so decide whether Feltex's prediction was reasonable. He was called by the shareholder plaintiffs. The evidence suggests that the plaintiffs are in fact being controlled by the defendants. It has become completely obvious that this shareholders action is in fact an initiative of the defendants in the case and other parties including elements at least of the Australia and New Zealand Governments who instigated the Feltex IPO. Mr Gavigan, a former Fay Richwhite executive, was ready waiting for the disgruntled Feltex subscribers, as the company failed. He performed a similar function on the shareholders of Southern Petrolium and took a drawn out action on their behalf which netted them nothing. The motive for him promoting both these actions was to prevent a genuine action being mounted which might be hard to overturn, even with a corrupt judiciary.
The judge in Houghton v Saunders, Justice Dobson, has accepted Mr Meredith's evidence that the assumed 1% (p.a.) increase in market size was reasonable. He should have seen it as evidence that the plaintiff case was fake. He was a speaker at the inaugural session of NZ's Supreme Court which occurred about 2 months after the Feltex IPO. The jurisdiction of the Supreme Court commenced on 1 Jan 2004 and so covers the IPO. We claim that this event brought about a new era of judicial corruption. Some overstatement of the market share assumption was claimed by Mr Meredith. Consideration of that claim is contained in paragraphs 311 to 323 of the judgment . At paragraph 312 the claim is that there is no reasonable basis on which to assume that Feltex would increase its market share. The matter has been reduced to consideration of just 1% of Feltex's projected revenue and not 5% or 6% which is the difference between what had consistently been Feltex's loss of sales due to falling market share (4% or 5%) and the 1% increase in revenue due to an assumed rising market share which Feltex adopted. There was no reason to think that a 0% change in sales due to change in market share was normal and only the 1% increase had to be justified. In paragraph 314 it was shown that in past three known years Feltex had lost 4.2 percentage points of the total market but no attempt was made to show the percentage of Feltex's sales which this represented. It is close to 5% per year. It is a huge turnaround to get +1%.
Then in paragraph 323 the judge talks about discussions taking place in early June 2004. The IPO money was all in then. The time for the directors etc to be taking special care was one month earlier. The news which the directors had in early June 2004 was that institutional investors had generally shunned the issue, confirming that their projections were not believable to expert investors. The comment of Mr Mcgill, Feltex's CEO, that the company was in "the best shape it has ever been in" surely related to the fact that the share issue had repaid Feltex's $50m debenture and debt had therefore reduced by about 30%. Nevertheless it is just madness to suggest that the directors could assume a huge turn-around in market share because of apparent optimism of their CEO which was the reason the judge saw the assumption as being acceptable.
The judgment refers to an Australian investment firm operating in Australia and Britain by name of Hunter Hall (think Hudson and Hall because something is being cooked up here). At paragraph 503 it is claimed by the plaintiffs and accepted by the judge that this firm made an unexpectedly large commitment "at some $39m" to the IPO. It was apparently achieved by some hard work by Forsyth Barr, a joint lead broker. We can not find any reference to them not going through with this commitment. However we can see no reference to this firm on the list of the 20 largest shareholders of Feltex as at 31 July 2004 as contained in Feltex's annual report to 30 June 2004. The 20 largest companies contains many nominee type companies but none of them are near large enough to hold all the $39m on behalf of Hunter Hall. One might think perhaps Hunter Hall made this investment on behalf of many individual clients. But that does not appear to be the way it works. Its investments are in a pool and its depositors share in the in the proceeds of that pool. There seems to two or three such Hunter Hall companies operating. We have found the Annual report of one such company and it shows it did hold Feltex shares at the end of its 2004 year and it did acknowledge selling off those shares at a substantial loss in it 2005 report. The 2004 value was much less than the $NZ39m so presumably other companies held the rest. The analysis as at the 31 July 2004 shows as contained in Feltex's 2004 annual report is less than $0.5m of shares held by Australian shareholders, and by shareholders in the rest of the world other than New Zealand and Australia. $39m is about 15%. Presumably all the Hunter Hall shares were deemed to be held by NZ nominee companies which is a very shabby practice. Investors in Hunter Hall might have been most unimpressed if it had stood out as being the biggest investor in Feltex by far and with much justification. Hunter Hall also do not appear on the list of 20 largest shareholders as at 31 July 2005 either although most of the nominee companies are gone from that list. That is consistent with Hunter Hall having sold those shares. The Australian shareholders have gone up somewhat to 7.05% or $17m worth at there issue value however 5.08% shares are here held by Godfrey Hirst Australia, who eventually purchased nearly all Feltex assets. Hunter Hall said it believe Godfrey Hirst had bought many of its shares in the 2005 report we found.
Mr Peter Hall, Executive Chairman of Hunter Hall was called as a witness by the plaintiffs, but he appears to have little of relevance to say. This shareholding of Hunter Hall, would seem to have been concocted by the Plaintiff management, who we say were working as a team with the defendants, to counter the claim that virtually no commercial institution type investors had subscribed to Feltex.
One of the five directors of Hunter and Hall (international ltd) is a New Zealander or ex New Zealander by name of Naomi Edwards. Ms Edwards has a first class honours degree from the University of Canterbury(NZ). It is unlikely that Ms Edwards was a director of the firm when the alleged subscription to the Feltex IPO was made however she no doubt was in 2014 when the Executive Chairman of the firm appeared as a witness to the Houghton v Saunders hearing. We say this NZ connection would be of much interest to her and that she should have her maths degree taken off her for not espousing that the Australian Carpet Market size on page 37 of the Feltex prospectus was incorrectly analysed and the past sizes indicated that there would be a 3% fall from year 2003 to 2005 not a 2% rise. Ms Edward's father, Brian Edwards, has been a close associate of former Prime Minister Helen Clark who has been involved in many of the Securities Commission and judiciary appointments which have dealt with the Feltex affair. He wrote a "portrait" book about Miss Clark. He practices as a political commentator and makes regular appearances on the Radio NZ 4pm
"panel". We say he is not fit for this position. He has said that this daughter practices part time as a stand up comic, and that is the way she would seem to be treating the Feltex IPO victims. We say this Hunter Hall scenario is very much a scam.
to top of page 17 The worst part of the scandal is the appalling collapse of market confidence as regulators are appointed not to project firm consistent regulation but to ensure that the corrupt Feltex IPO dealings are covered up. Kevin Simpkins who was "retained" by the Securities Commission to "report" on Feltex was made chairman of the Accounting Standards Review Board which took over accounting and audit regulation from the Institute of Chartered Accountants. He has come from South Africa in the early 1990s as has Feltex's Chief Financial Officer, Des Tolan and Feltex' chairman at the time of the IPO, Tim Saunders. The regime they come from was all about misleading the population to retain white power. The only two accountants on the board establishing the Financial Markets Authority, replacing the Securities Commission and a few other agencies, are Bruce Sheppard, mentioned in 15 above, and Scott St John, managing director of First NZ Capital the other joint lead broker of the Feltex IPO and apparent close associate of the vendor and promoter of that issue, Credit Suisse organisations.
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18 The action against five Feltex directors concerning Feltex's six monthly report to 31 Dec 2005 is something of a circus. The companies office did not appeal the decision which talks about not a skerrick of evidence and them being all honest men, but appealed the costs awarded to the defendants which appears to be fully consistent with the judgment. The judgment says these directors were entitled to rely on advice from Ernst and Young who were the company's auditors and reviewers, but they were not. The company system relies on there being two sets of expertise, that obtained from a source other than the auditors or reviewers and adopted by the directors, and that of the auditors or reviewers. Judge Doogue, a female, was promoted to Chief District Court Judge soon after delivering this judgment in respect to Feltex directors.
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19 Given the evidence above it is reasonable to deduce that given the IPO was in May 2004 and the Games were held in August that year senior elements of the Labour and National parties conspired to promise protection from prosecution, or at least conviction, for people, led probably by (Sir) Eion Edgar, who proposed and actioned the selling of the worthless company, Feltex Carpets, which had a good name in NZ, by way of an Initial Public Offer on the Stock Exchange to amateur investors and the ACC, for the princely sum of $250m.
We remember around that era an announcement that the National and Labour parties were conferring to develop joint policies in their mutual interest. We know of no announcement of any resulting policy. However the "Feltex IPO" was undoubtedly an illegal outcome of such negotiations. The National party in 2004 had a new leader in Don Brash who no doubt was keen for the party to recover from its 27% vote in the 2002 election. Mr Brash made a controversial speech at Orewa in January 2004 which improved the party's polling, probably by attracting those with anti-Maori sentiment. He would also recognise that a good result for the country at the forthcoming Olympics would help the country return to its traditional voting patterns.
to top of page 20 More evidence as to the crookedness of Sir Eion Edgar if more evidence was or is ever needed arose in 2011. This article was put on Stuff and probably other Fairfax publications in May last year but we only come across it in April this year 2013. It tells of Sir Eion selling shares for $40,000 that were previously valued at about $80,000 in order that he might receive an extra million dollars worth of such shares at the expense of other ordinary shareholders, upon the conversion of preference shares to these ordinary shares. The values quoted are fickle but that is no excuse. We say too much was made in this article of the company concerned, Blis, being a minnow or molehill. The same principles apply regardless of size. We say Sir Eion should have been in the headlines. We say the article should have referred to Sir Eion's role in the Feltex IPO. We say Sir Eion was relying on an unofficial immunity from prosecution which has been conferred upon him along with his knighthood for his "services rendered" in respect to the "Feltex IPO" which we expand upon below.
to top of page 21 Then in June 2013 the same people put out this follow-up because the Stock Exchange has not reported on its investigation. But there is a lot of nonsense added to it. The author has given himself the name of Chalky. We think the publication does not really want to expose this indiscretion of Sir Eion. Interestingly the "tough" Financial Markets Authority declared that there was nothing wrong with the practice. They are just Government puppets.
to top of page 22 To move on, we are now convinced that the Feltex IPO for gold and silver medals has an Australian dimension. Australians were embarrassed in 1984 when they got 4 gold medals at Los Angeles Olympics in 1984 (NZ got 8) despite the withdrawal of the Soviet Bloc. They made amends to that by legitimate means but the results in later years have been so good that it is obvious that illegitimate tactics have also been employed. We are suspicious of the story that they discovered that their swimmers where over-weight so sent them on morning runs to correct the problem. When NZ got (only?)one gold and no silvers in Sydney in year 2000 it seems Australia has agreed to "share" their "skills". One gold should be recognized as a considerable achievement for a country NZ's size. We note the following connections:
A The first is not a highly convincing connection but nevertheless is worth mentioning. The 2000 Summer Olympics were staged closer to the Australian winter, in late September. Feltex carpets bought the Australian carpet plants of Shaw Industries in March 2000, so the purchase was not in response to NZ's poor Olympic performance but it might have been in response to an anticipated poor Olympic performance. NZ really only had one gold prospect. Helen Clark had come to power in late 1999 and would promptly be looking for ways to extend her reign.
B Feltex, a NZ company progressively moved its head office to Australia without indicating it was doing so. The non-NZ content of subscribers to the 2004 IPO was however very low, about 1%. Its Australian workforce must have been kept away from it with the assistance of the Australian establishment. One Australian institution did invest however and has been protesting strongly.
C Two Australian crooked female academics, "Plane" Jane Diplock and Keitha Dunstan, came across the Tasman to take up seats on NZ's Securities Commission. Diplock became the commission chair while Dunstan (who was perhaps born male) had a special unit at Wellington's Victoria University set up for her which was dismantled on her departure. With a couple of NZ females they formed the quorum which looked into the Feltex IPO with their eyes closed along with their advisor on the matter, former South African Kevin Simpkins who also seemed to get a special unit at Victoria. He is still around though unfortunately.
D The Audit firm Ernst and Young were able to confuse their Australian and New Zealand operations so as not to be caught out too much. Gordon Fulton came before the accountants disciplinary tribunal and argued that the work complained about was actually done in Australia. He just signed the audit report to give it an NZ face as the directors wanted. The tribunal referred the matter the Australian Securities Commission or some such and nothing has been heard further.
to top of page 23 Let it be stressed that the Labour Party which was in power in 2004 had equal or greater reponsibility for this crime. It was the one with most to gain in the short term. It was the one which engaged corrupt officials or corrupted them when in office. There is of course little or no excuse for officials to allow themselves to be corrupted. They all must face jail.
to top of page 24 Let it also be stressed that this action was a crime. While a majority of members of parliament can do almost anything by way of Act of Parliament, this process was not followed here, and hence MPs have the same rights to break the law as ordinary citizens. None.
to top of page 25 We now mention New Zealand's latest Olympic performance in London in July/August 2012. There might have been Feltex money left over to help fund this "effort" but the main reason we cite it is as evidence NZ is firmly in the cheating game. If one is having "success" it is hard to quit. We mention also that the NZ rowing team is sponsored by Mighty River Power an electricity company with Government majority ownership which is chaired by Joan Withers.
In terms of gold medal per capita NZs 2012 performance was ridiculously high, matched only by Jamacia. NZ "won" six gold medals. This follows three gold medals "won" at each of the Beijing and Athens games, also very high performances per capita.
The uneven composition of NZs recent Olympic hauls combined with the high golds per capita make it a giveaway that cheating is involved. Its gold,silver,bronze stats in London of 6,2,5 (3,2,4 Beijing 3,2,0 Athens) compares with some former Olympic host nations like Canada 1,5,12 Sweeden 1,4,5 Finland 0,1,2 Greece 0,0,2 Mexico 1,3,3 and similar sized countries to NZ in terms of population and stature, Norway 2,1,1 Belgium 0,1,2 Denmark 2,4,3 Ireland 1,1,3. Netherlands did 6,6,8 but its population is 4 times that of NZ.
It is quite clear that NZ has been buying licenses to cheat in particular events from corrupt Olympic officials. This has started with the Feltex IPO in 2004. The composition of NZ medals between gold silver and bronze is a dead give-away that cheating has gone on. There are many events where only one entry per country is allowed. The superpowers naturally have a good chance of winning these (and all) events and hence they have a disproportionately high number of gold medals because often you can't get a lesser medal having won the event. As a result one would expect smaller countries to have higher proportions of minor medals, but not so NZ in recent times.
The trouble with selected case drugs cheating is that it is presumably quite easy to produce a gold medal, you just administer a big dose. But getting a silver is a different kettle of fish. If the dose is too big you get another gold, too small and its a bronze or less. One way is to give a large dose to two competitors in the one event as we suspect was done in the triathelon at Athens, but this can't be done too often. As is fully understandable NZ's 2012 "haul" has a dearth of silvers and those it did get (including one temporarily held) came quite late in the circus.
The story of Ms Adams, NZ's shotput champion not being entered lacks credibility. She was refused the right to compete but this decision was reversed on "appeal". Firstly it would been known very early in the piece if the world champion and 2008 champion had genuinely not entered and the matter would have been sorted out then. Secondly, according to the rules either she would be allowed to compete or she would not have been. They would be sure of the ruling before they said anything and they would not chop and change. It is obvious that an agreement had been reached that if NZ was winning too many golds, either absolutely or in relation to silvers, then Ms Adams would have been deemed not to have entered, so as not to aggravate the problem. But at the last minute an arrangement has been made that her rival would be licensed to win so probably giving NZ a much needed silver. But the protocols for a licensed win understandably were not followed and the rival has got caught. The rival has correctly we think claimed that Ms Adams "non-entry" was related to cheating but the media won't examine the evidence. They just vilify the rival as is the popular thing to do.
Of NZ's other silvers one was in a highly peculiar yachting event when it was known with many races remaining that NZ would get silver and could only get silver. The other was the lady BMX cyclist who we speculate was probably told she could have a good result if she promised only to get silver. The winner was in the lane next to her and she followed the winner in about a spoke length behind.
to top of page 26 Eion Edgar converted his high honour into a knighthood when knighthoods were brought back. He was in 2009 named inaugural Senior New Zealander of the Year, an award which may have been instigated to keep up his status and invincibility. He had just met the qualifying age for such an award.
to top of page 27 The Financial Markets Authority, which took over from the Securities Commission on 1 May 2011 is acting like a replacement organisation rather than the same organisation with a new name. It has dropped almost all historic Securities Commission information, going back to 1980, from its web site. Its attitude is clearly "let's start again" which is typical for an organisation who's objective is to cover up wrongdoing. The Institute of Chartered Accountants similarly took over from the Society of Accountants in the mid 1990s. Complaints about any wrongdoing by accountants during the Society's tenure had to be made within one year of the Institute's takeover when the Society completely closed down. Of course it can take many years before an accountant's misconduct becomes apparent. Now the Institute likes to see that changeover as being simply a name change so that it can present a "fine tradition" of continuous service.
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28 The scandal has assumed manslaughter or murder dimensions with the deaths of Paul Phillip Wilson aged 21 at Easter 2011 and David Gaynor, aged 17, a few months later. Both appear to have died of self harm or reckless behaviour following alcohol or illicit drug taking. Paul's mother was Marketing Manager at Feltex during the IPO while David's father has written extensively on the Feltex saga and on the Securities Commission for the New Zealand Herald. David's father wrote an article entitled "Business Ethics a Million Miles Away" in the NZ Herald on 15 July 2010. We submit that this was one of the biggest blows struck in the world of business. The article criticized 4 people including Craig Norgate. He claimed Mr Norgate had not lived up to his promise of putting $30m share capital into the company he formed called Rural Poetfolio which had failed. He claimed the Securities Commission had been slack in not doing anything about this. In other articles Mr Gaynor has accused the Securities Commission of "going to sleep" over the Feltex IPO. We claim this is an understatement, and Mr Norgate has taken advantage of a period when the Commission had agreed to see nothing wrong so that the Government could complete its Feltex IPO robbery for the purpose of funding cheating at the Athens Olympic Games.
The terrible thing about Mr Gaynor's "million miles" article was that it seemed to be completely ignored. Pupils at Kings College where David and a daughter of Mr Norgate were in year 12 would form the opinion that this attack was unwarranted and David would be in their firing line. The school we believe had a duty to arrange for David to be transferred elsewhere. The school ball for that year was held about a month after this publication and would have been painful for David. We suspect Mr Norgate would have been involved with a post ball function which were in vogue at that time.
David was invited to a pre ball function hosted by Mr Norgate the following year. While a purpose of this function seemed to be to "allow" pupils to have a few alcoholic drinks before the function, against school rules, the evidence is David preplanned to take illicit drugs and liquour prior to the Norgate function and so did. He phoned his date and asked that she find her way to the function independently as he was "too drunk" to drive there with her. We are sure this behaviour was related to his father's attack on Mr Norgate.
The Chief Coroner offers no explanation as to why David deliberately got drunk and drugged prior to attending the Norgate function. He fails to mention the apparent huge spat between David's father and Mr Norgate which the "ethics a million miles away" indicates. He acknowledges that David's claim by text that he was caught with drugs on him by the school was a lie but fails to draw from that that David even might have been deliberately giving false reasons for his pending death.
The parents of both these young men have no doubt been pressured into going along with huge lies contained in the IPO prospectus which no doubt at times has badly distorted their personality and hence parenting ability.
to top of page 29 The Commerce and Justice portfolios of the Government have been mostly involved with this operation. We reflect upon the situation of the current (from late 2003) mayor of Christchurch City. Lianne Dalziel was the Minister of the ACC. She left or was removed from the ACC job in on 15 August 2002. Eion Edgar was appointed as a member of the ACC board and chair of its investment committee in September 2002. We believe this was an early step in the buildup to the Feltex IPO robbery of April/May 2004. Ms Dalziel then became Minister of Commerce and Associate Minister of Justice on the said 15 August 2002 and held these posts until 21 February 2004 when we suspect with the Feltex robbery looming she found the posts too hot to handle. She was rumoured to have suffered mental depression which in the circumstances would not be surprising. She took light duties as a cabinet minister from then until 19 October 2005 when she regained Commerce and took on Small Business and Women's Affairs. She remained with the Commerce portfolio until her party was voted out of office in November 2008. Former party president Margaret Wilson was, we believe, "hand picked" for the justice ministry job but never made it there. She came to parliament with a high place on the party list. We think she was unimpressed with the need to maintain a corrupt judiciary. Simon Power, ranking No 4 in the National lead cabinet, had both Justice and Commerce portfolios during the first term of this Government from late 2008, but he has "surprisingly" given up politics and gone to work for a bank. The new Commerce Minister from late 2010 (ranked 19), Craig Foss, worked as a trader for the Bank of New Zealand during its controversial "mixed ownership" years of 1985 to 1993. During this period the bank over borrowed heavily and had to be twice bailed out by the Government to the total tune of $1b+ (see item 1 above). In 1990 of course it declared a $100m profit which did not exist. This was investigated by the Government appointed Securities Commission which found all the practices used to create the profit to be unacceptable but found that nobody had wilfully done anything wrong, if it is possible to believe that. Mr Foss then moved overseas to become a trader and securities officer with the Swiss based financial multinational Credit Suisse. Mr Foss moved back to New Zealand in preparation to becoming a National MP in Hawkes Bay, about the time of the Feltex IPO of which Credit Suisse approved organisations were the vendor and promoter.
href="#a1"> to top of page 30 The corrupt audit firm Ernst and Young has played a big part in this scandal. It "audited" the Bank of New Zealand in 1990 and also Feltex Carpets. One of its auditors, Gordon Fulton, was censured by the NZ Institute of Chartered Accountants over events subsequent to the IPO after a week long hearing. While Feltex was making reduced profit announcements in 2005 and everyone on the outside was wondering how long it might be before its bank appointed a receiver, Mr Fulton, on the inside, purports to have been of the opinion that Feltex would never allow this to happen. He knew that Feltex was having a meeting with its bank in September 2005, seeking to increase the borrowing facility. He knew Feltex was likely to breach its banking covenants if these covenants were not altered but somehow "thought" that Feltex would lay down the law and maintain its independence, so much so that he did not bother to take a look at the amended agreement.
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General corruption of the judiciary plays a major part in this scandal. The Supreme Court of NZ came into play on 1 January 2004 and actions after that date cannot be reviewed by the British Privy Council. About that time was a picture of the female prime minister and female leaders of most aspects of life. This all dissipated very quickly except for the position of Chief Justice which remains in female tenure. There was rumour of some rift having developed between the Chief Justice and former Prime Minister Helen Clark. We believe the rumour was a jack-up to give a sense of judicial independence The Christchurch judge Christine French would seem to have been lined up for shareholders action we refer to in item 16 but pleasingly we thought she would seem to have chickened out. We now see that she was appointed to the Court of Appeal a year ago but that does not change our suspicion. Preliminary hearings have been held in Christchurch perhaps because that is where Justice French has resided. But the appellant's now solicitor resides there also and the representative shareholder is a Southislander. But we nevertheless think stirrings including perhaps those of ourselves have brought this judge to her senses. There has got to be a judge who will put blame on the Government or main opposition party from those influential party's point of view. But we think that is going to be hard to deliver upon.
We tried a little research on
Justice Dobson and came up with this site http://www.courtsofnz.govt.nz/from/speeches-and-papers
At the bottom of this page are listed four speeches made at the first sitting of NZ's supreme court on July 1st 2004, some 2 months after the Feltex IPO. The date from which this new court has jurisdiction is 1 January 2004, a little bit before the IPO so the IPO can not be considered in London. It makes sense. We have not bothered to read the speeches but the people who delivered them are of some interest to us. One is from the unnamed Attorney-General. We took a glance at this one. It talked about our right as a country to make our own mistakes, just as a child falls over many times learning to walk. We think this forward looking Government had prearranged a series of "mistakes" to be made if necessary. Anyway, another such speech was made by the new Chief Justice as one might expect. This chief was in a photo of a whole lot of female leaders in all walks of life which had been put together by the Clark regime. It all dissipated quite quickly except for the Chief Justice who has license to rule for some years yet. The cost of expediency can be high. Mr Chris Darlow also gave a speech. Mr Darlow was Joan Wither's (Feltex's only female director who "served" from the time of the IPO to the start of the company's outward collapse) solicitor and he has had the cheek to try and tell us that Ms Withers is a thoroughly honourable individual. He did not look to see what evidence we had to the contrary. Mr Darlow sits on the NZ Press Council representing newspaper readers. What readers voted him in we would like to know. And the fourth person to deliver a speech was Robert Dobson QC who we assume is now a judge and has heard and dismissed this Houghton v Saunders action.
Well the message we are suggesting is that there is an inner core of legal people monitoring the Feltex robbery to see that none of the culprits get into trouble. Judge Doogue clearly did this in the MED v Feeney case where she ruled that company directors could employ the company's auditors to prepare the company's accounts on the director's behalf. Effectively then only one set of accounting expertise, that of the auditors, has been used. It is twice as easy for one set of expertise to be corrupt as it is for two sets of expertise to so be. That is why we used to have auditors who were independent of those who prepare the accounts. Now following Judge Doogue's promotion earning ruling it presumably does not apply. Judge Doogue promptly became the Chief District Court judge following this ruling which was not appealed. The idea of independent auditing has been rubbished to the public. David Ross seemed not to have any auditors and the people who dealt with him didn't seem to care. Even the FMA seems not to be saying the investors in Ross Asset Management should first have insisted on seeing and verifying a recent audit report for the firm. Auditing is being treated with contempt.
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