mark_au,
Now more than ever, BEPPA is the stock to be in. The banks are calling the shots and they do not give one iota about dilution to BBI holders.
Imagine what happens in 2012 assuming the BBI share price is still in the toilet?
I have noted a few comments about the "banks calling the shots" or similar.
Lets consider a purely hypothetical situation.
Banks, as sources of finance, are critical to a Responsible Entity (RE) and necessary in the operation of a registered scheme such as BBI. Now as I understand it the RE is not in breach of any lending covenants etc, although it is sailing very close to the wind.
If the RE was allowing the banks to run the business in their interests and considerating BBI is not under any form of formal management then the RE would likely be in breach of its obligations under Corporations Act s601FC, this states as follows (important sections only noted with key sections underlined):
In exercising its powers and carrying out its duties, the responsible entity of a registered scheme must:
(a) act honestly; and
(b) exercise the degree of care and diligence that a reasonable person would exercise if they were in the responsible entity's position; and
(
c) act in the best interests of the members and, if there is a conflict between the members' interests and its own interests, give priority to the members' interests; and
(d) treat the members who hold interests of the same class equally and members who hold interests of different classes fairly; and
(e) not make use of information acquired through being the responsible entity in order to:
(i) gain an improper advantage for itself or another person; or
(ii) cause detriment to the members of the scheme; and
(f) ensure that the scheme's constitution meets the requirements of sections 601GA and 601GB; and
(j) ensure that the scheme property is valued at regular intervals appropriate to the nature of the property; and
(k) ensure that all payments out of the scheme property are made in accordance with the scheme's constitution and this Act; and
(l) report to ASIC any breach of this Act that:
(i) relates to the scheme; and
(ii) has had, or is likely to have, a materially adverse effect on the interests of members;
as soon as practicable after it becomes aware of the breach; and
(m) carry out or comply with any other duty, not inconsistent with this Act, that is conferred on the responsible entity by the scheme's constitution.
Also the directors of an RE are jointly and personally responsible for ensuring an Australian Financial Services licensees compliance with the financial services laws, which includes key sections of the Corps Act.
If an RE ever put the interests of a service provider or financier before those of members and this was done other than in the best interests of members then the RE would have all sorts of problems. And we havent even started looking at the obligations under the Constitution.
All this of course is purely hypothetical as I am sure such a situation would never arise.
I hold BEPPA only
Cheers