BCS - BrisConnections Unit Trusts

cuttlefish · 1 January 2009

Re: Brisconnections shareholders - financial ruin

The other area of potential confusion for newbies is that the instalments on contributing shares aren't always mandatory - so not all CA share suffixes imply a mandatory additional payment. For no liability companies (NL) the instalment payments on contributing shares are optional and the only penalty is that the shares are forfeited if the instalment isn't paid. So even if people were aware there were instalments remaining to be paid they may not have been aware they were mandatory.

Have any of the people stuck in this situation investigated from a legal and accounting perspective whether there is any feasability to the idea of buying up a majority of shares, voting out the current board, and then changing the rules around the instalment payments, or instigating a wind up of the company?

rocket12 · 1 January 2009

Re: Brisconnections shareholders - financial ruin

Julia said:
Rocket, you don't seem to have a 'classification' for those of us who feel very sympathetic to your situation, but who do not feel OK about the responsibility for the debt being passed off onto e.g. some homeless person.

I've previously said that I'd have thought there was a case against Comsec for not making the further two payments clear on the final Buy screen.

From the screenshots we've put up from Etrade and NAB, they appear to make the info available but I don't know if this was the case when holders bought the shares. I suppose they could have added it after all the mess came to light.

From page 2 of the PDS

Hi Julia, none of the far fetched options are being entertained by any of us. As I've stated before I have my shares up for sale in the market as do most of the others caught out, but hope that the only people who buy them off me are MaqB. I would be horrified if someone else in the same boat as me bought them. Those of us that bought via Commsec, Westpac etc wont be taking this lying down. We all hope that the the powers that be come up with a solution, but we will be doing everything we can legally incase it goes all the way.

Obviously none of us that bought read the PDS. I did go to the Brisconnections website and looked at their investor page to find out more as to what they were up to but didn't go investigating through the PDS. It isn't compulsory to go searching for the PDS of any share. I've bought hundreds of shares witout reading through a single PDS, and made some nice money along the way. Some of you will find that unbelievable. I have even bought shares since BCSCA without searching through their PDS. However now that I know about contributing shares I only stick to 3 letter codes...

On a side note some of the 8 posters think that we were gready buying a stock hoping to make a quick buck. Hehe that really takes the cake, I'm going to stock up on some shares tomorrow that I hope to make a quick loss on.

rocket12 · 1 January 2009

Re: Brisconnections shareholders - financial ruin

sails said:
Hi Rocket - hope your Christmas / New Year has been OK. I would imagine this situation would have been somewhat of a dampner.

33:8 gives 76% so far agreeing that this is an incredibly easy trap for newbies to fall into.

I don't feel that offloading them to a homeless type person is morally right either - except that the homeless person:
(a) wouldn't be buying the shares - would likely be a gift with an extra cash bonus and
(b) they should be informed before the deal was done with the the option to decline.
This appears to be a fairer deal than the newbie investors who fell into this.

Certainly not condoning it - just comparing the apparent fairness (or lack of) of the two deals.

Sunder hasn't replied to my last post yet - can anyone else find educational material on these unit trusts or contributing shares on the ASX site?

one of of the 13 links on the left hand side of the main page
www.asx.com.au click on the "market supervision and rules" link

Then in the drop down menu click one of the 11 links "rules guidance notes and waivers"

Then click on one of the 19 links in the middle of the page "guidance notes"

Then click on one of the 27 links "market codes and trading proceedures"

Then scroll down 5 pages and you find the information that apparently only the dumbest of retail investors doesn't know....

Cant believe I missed it....

sails · 1 January 2009

Re: Brisconnections shareholders - financial ruin

rocket12 said:
one of of the 13 links on the left hand side of the main page
www.asx.com.au click on the "market supervision and rules" link

Then in the drop down menu click one of the 11 links "rules guidance notes and waivers"

Then click on one of the 19 links in the middle of the page "guidance notes"

Then click on one of the 27 links "market codes and trading proceedures"

Then scroll down 5 pages and you find the information that apparently only the dumbest of retail investors doesn't know....

Cant believe I missed it....

Wow, no wonder I couldn't find it quickly! I can't believe that such relevant information is buried so deeply

And yet so easy to find educational info on options and warrants on their site.

sails · 1 January 2009

Re: Brisconnections shareholders - financial ruin

Rocket - I found a document on "Continuous Disclosure" buried deeply where the code info is also buried. http://www.asx.com.au/ListingRules/guidance/gn08_continuous_disclosure.pdf
It's 25 pages long and I don't have time to go through it carefully, so not sure of it's usefulness. It says that ASIC's "Better Disclosure to Investors" guidance principles are included in the document and talks of the "spirit" of continuous disclosure - whatever that means

Calliope · 1 January 2009

Re: Brisconnections shareholders - financial ruin

rocket12 said:
32 posters in this thread believe that this situation is unjust, and 8 posters believe that the buyers are in the wrong, with about a dozen or so not expressing any real veiw as to rights and wrongs.

Its puzzling to me that there are 8 people here that believe that in a market place where millions of average punters are allowed to buy and sell, that you and I can be presented with a pruduct with 1000 times the purchase price sting. And for that sting to be mentioned nowhere on the main research pages. That this is OK.

It's not a matter of being unjust or right or wrong and it certainly is not a sting. You say you couldn't find anything about the Instalment Warrants on Comsec Research pages. I know it's cold comfort to you now, but you obviously didn't look. All you had to do was click announcements and all would have been revealed. Especially the market sensitive ann on 30 Oct titled Distribution Update.

Anyone buying shares without reading their ASX anns is a very trusting soul indeed.

thermalmonster · 1 January 2009

Re: Brisconnections shareholders - financial ruin

I bought my shares well before such an announcement.

The future Liability should have been disclosed clearly at point of sale.

Indeed I dont think they should have been allowed for sale on via online sale because of the nature of the contract and liability.

For this kind of Transaction a solicitor needed to be invoked.

I couldnt by a house on line worth 290k without a solicitor & some form of contract, let alone 4 million worth of company liability

I take it you dont have consumer credit protection and consumer regulatory rules in Australia? (and thats by no way meant as an insult or anything)

thermalmonster · 1 January 2009

Re: Brisconnections shareholders - financial ruin

http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/C/ConsumCredR95.pdf

Yes you do,
Havent read it all but it mainly covers Loans ect.
Strange one this because We havent signed up for a Loan, but if MQG pay our Liability is that then a loan?

Completely baffled by this because usualy if anyone has a debt they have usualy borrowed money to purchase something.
Cant figure by what law you owe the money

If you have only partly bought a share, surely then their must be a credit agreement to purchase the remainder?

Calliope · 1 January 2009

Re: Brisconnections shareholders - financial ruin

thermalmonster said:
I bought my shares well before such an announcement

It's clearly explained in their ANX Announcement on the day they listed, 31 July 2008.

Anyone trying to make a case of non-disclosure against;

The bloke who sold the shares to him,
Comsec who brokered the deal,
Brisconnections, who floated the stapled security package,
or the ASX who made it all possible

would be doomed to failure.

rocket12 · 1 January 2009

Re: Brisconnections shareholders - financial ruin

Calliope said:
It's not a matter of being unjust or right or wrong and it certainly is not a sting. You say you couldn't find anything about the Instalment Warrants on Comsec Research pages. I know it's cold comfort to you now, but you obviously didn't look. All you had to do was click announcements and all would have been revealed. Especially the market sensitive ann on 30 Oct titled Distribution Update.

Anyone buying shares without reading their ASX anns is a very trusting soul indeed.

All was not revealed after clicking the announcements link. There are well over 50 announcements that you have to go through one by one. So tell me honesty when you buy a share you go through every single announcement of every share you buy. So you really think that hidden amongst 50 announcements is the best way to inform people?? Why could E-trade and NAB online broking both in bold lettering state that this share is $1.00 paid $2.00 unpaid??

I agree with you that it isn't a sting, I meant a sting in the tail. A sting implies that this was done deliberately, and I don't believe anyone involved in selling these shares missled in this way on purpose.

thermalmonster · 1 January 2009

Re: Brisconnections shareholders - financial ruin

Absolutely couldnt agree with you more Rocket !!

I am sure MQG would rather have people that could pay their second installment rather than defaults whom they will have to chase and probably end up with next to nothing.
Surely the powers that be in BCSCA must be thinking Sh*t how the hell did we let this happen

Garpal Gumnut · 1 January 2009

Re: Brisconnections shareholders - financial ruin

I can hear the pain you guys who were stung but I knew this stock was a dog from the day it listed.

It opened at .65c from memory and closed in the .40c's.

For months afterwards the popular press flagged the obligation that holders or buyers had to come up with the next 2 instalments of $1.

Some folk saw this stock selling at a cent or less and bought.

That is tough on them but not as tough as those who bought at .65 C and didn't get out.

One cannot legislate for people in a market.

Go to your local veggie market of a Sunday, and it will give you more insight into the ASX than any amount of legislation.

gg

cutz · 1 January 2009

Re: Brisconnections shareholders - financial ruin

Garpal Gumnut said:
That is tough on them but not as tough as those who bought at .65 C and didn't get out.
gg

Yeah but the guys that bought at 0.65c probably didn’t buy enough units to sink themselves.

thermalmonster · 1 January 2009

Re: Brisconnections shareholders - financial ruin

Was just digging around on a couple of UK FTSE sites, different laws and regs I Know however an interesting read,

Follows:

Normally, a partly paid share would not be regarded as being of the same class as a similar share which was acquired fully paid. You may, however, treat partly paid shares as being of the same class as fully paid shares provided the balance of the subscription price is payable within six months of the issue of the shares. This practice applies both to rights issues and a purchase of shares in the market. If a public company does issue partly paid shares the terms of issue will normally specify that the full price be paid by fixed instalments within a relatively short period of time. In practice the Stock Exchange would be unlikely to give a listing to partly paid shares.

I like the last sentence !

Garpal Gumnut · 1 January 2009

Re: Brisconnections shareholders - financial ruin

cutz said:
Yeah but the guys that bought at 0.65c probably didn’t buy enough units to sink themselves.

And that is the nexus of the argument mate.

Couldn't have put it better myself.

Buy 2 rotten apples and its a disaster.

Buy 200 container loads when you've never imported and exported and you are stuffed mate.

gg

rocket12 · 1 January 2009

Re: Brisconnections shareholders - financial ruin

Garpal Gumnut said:
And that is the nexus of the argument mate.

Couldn't have put it better myself.

Buy 2 rotten apples and its a disaster.

Buy 200 container loads when you've never imported and exported and you are stuffed mate.

gg

No you wouldn't be stuffed, you would just lose the 200 container loads.

Garpal Gumnut · 1 January 2009

Re: Brisconnections shareholders - financial ruin

rocket12 said:
No you wouldn't be stuffed, you would just lose the 200 container loads.

Have you ever worked with importers and exporters, makes underbelly look like a walk in the park.

gg

thermalmonster · 1 January 2009

Re: Brisconnections shareholders - financial ruin

Hi Rocket

What is the reason the shares cannot be Forfeited like all the other partly paid ASX securities?
I have googled a few PDF reports where all unpaid stapled securities have just been forfeited.

If this is not the case with BCSCA then surely a different listing was required, or NO LISTING AT ALL

rocket12 · 1 January 2009

Re: Brisconnections shareholders - financial ruin

thermalmonster said:
Hi Rocket

What is the reason the shares cannot be Forfeited like all the other partly paid ASX securities?
I have googled a few PDF reports where all unpaid stapled securities have just been forfeited.

If this is not the case with BCSCA then surely a different listing was required, or NO LISTING AT ALL

Thats what will/should happen in the future after this has all been dealt with. Don't know why they are different though, I did the same google searches after I realized what I had bought so it was all new to me.

prawn_86 · 1 January 2009

Re: Brisconnections shareholders - financial ruin

chops_a_must said:
No. What gets my goat (and no you can't have our goat, we got rid of it ages back), is the complete misrepresentation of what something is.

Capitalism, free market trade, whatever you want to call it, at its fundamental level was never meant to be a free for all.

...{removed for brevity}

By the way, this has no bearing on my opinion of giving a bum these shares. I just wanted to get across that it wasn't merely "capitalism". I hope I made that clear. :

I can totally see your point chops, and it is often a point i have pondered myself. Somewhere along the lines, morals went out the windows. I think it is something to do with mans inherent greed, and now we have something to blame our greed on (capitalism) then we can also blame our declining business morals on it.

While i agree with wat you say, im at a total loss as to how it can be fixed. I think everyone has their own moral compass and they decide how far they are willing to go personally. I have often wondered that of myself, providing what i was doing was legal, how far would i go even if it was not 'right'?

What are your ideas as to how to get morals back into business? (Perhaps it should be another thread so as not to derail this one further?)

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