BCS - BrisConnections Unit Trusts

[cuttlefish]

Re: Someone is accumulating BCSCA

In The Australian today it said that people who had made offmarket sales had to check that the people they were selling to were bona fide purchasers and if they could not afford the liability of the instalments, then this could revert to the original owner. (I think it was Michael Walshe) Yet here is Mac with its own shelf company..

What I don't get is - why is it ok to sell the stock on market to purchasers that can't afford to pay the liability, but not ok to sell it off market to purchasers that can't afford to pay? So its actually ok to perform dodgy transactions as long as its done via the ASX? Macquarie offloading last year to unwitting buyers (that can't afford the instalments) on-market is fine, but they'll jump and scream about those same buyers not being able to find any mugs to sell to 'on market' and selling instead off-market.

What kind of precedent does this set for all sorts of other 'off market' business transactions?

And in relation to the shelf company - has Macquarie injected the shelf company with the funds to pay for the two instalments - if not then what are the ramifications of that - have they provided guarantee's to the shelf company? etc. etc.

complete shambles that could have been prevented by sensible regulation much earlier on in the piece when the share price began to fall to levels where it became unsuitable for trading by retail investors.

 

[Prospector]

Re: Someone is accumulating BCSCA

What I don't get is - why is it ok to sell the stock on market to purchasers that can't afford to pay the liability, but not ok to sell it off market to purchasers that can't afford to pay? So its actually ok to perform dodgy transactions as long as its done via the ASX?

Yes, I think that's the bottom line because it is a third party transaction. Which means it isnt dodgy.

 

[gfresh]

Re: Someone is accumulating BCSCA

Yes, it will be QLD government and the tax payers will end up footing the bill.. so why didn't they just do this in the first place?

About time they f'ed off all these private toll roads, nearly all of them end in failure of one sort or another. There always seems to be some shiftiness going on behind the scenes with lack of true transparency.

 

[Absolutely]

Re: Someone is accumulating BCSCA

Well at least some holders managed to get out. 8% out of 83%, that's almost 10% of the shares held by retail.

Well yes this is good for those that got out but it must be to the detriment of the remainder who are left in. If Macquarie now have enough to prevent the winding up, those left in will be pursued for their installments I presume.

Easy to say in hindsight, but retail investors really needed to band together and collectively try and prevent Macquarie gaining a controlling stake. Leaving your shares on the ASX in the hope they will sell may or may not have come off for you. So some were lucky but those left behind are potentially in a more difficult position now I suppose.

 

[prawn_86]

Re: Someone is accumulating BCSCA

In the AFR today it said that Jim Byrnes will be seeking an injunction on some of the sales from yesterday, as they were already contracted to who he is working for, but the people had not taken the units out of the queue.

Lawyers must be loving it, there are about 3 cases running concurrently and more to come by the looks

 

[Prospector]

Re: Someone is accumulating BCSCA

In the AFR today it said that Jim Byrnes will be seeking an injunction on some of the sales from yesterday, as they were already contracted to who he is working for, but the people had not taken the units out of the queue.

Lawyers must be loving it, there are about 3 cases running concurrently and more to come by the looks

Just when you think there is a plan afoot, something from left field happens. So were these shares actually transferred to Jim, or was that just 'in train'; which was why they were 'left' in the queue; and if 'left in the queue' dont they have a counter obligation to actually have them available for sale? Which means they must now buy some in order to satisfy the conditions of the contract?

 

[prawn_86]

Re: Someone is accumulating BCSCA

Just when you think there is a plan afoot, something from left field happens. So were these shares actually transferred to Jim, or was that just 'in train'; which was why they were 'left' in the queue; and if 'left in the queue' dont they have a counter obligation to actually have them available for sale? Which means they must now buy some in order to satisfy the conditions of the contract?

All i know is that the lawyers will be laughing all the way to the bank. Im not willing to comment on contract law in a case like this cause who knows what will happen.

According to the AFR article there was already a 'contract' to buy some of the shares from JB's client offmarket, so if that contract is held up Mac Banks purchases may be invalide. Or as you suggest P, those who are supposed to supply JB may need to buy more...

 

[cuttlefish]

Re: Someone is accumulating BCSCA

All i know is that the lawyers will be laughing all the way to the bank. Im not willing to comment on contract law in a case like this cause who knows what will happen.

According to the AFR article there was already a 'contract' to buy some of the shares from JB's client offmarket, so if that contract is held up Mac Banks purchases may be invalide. Or as you suggest P, those who are supposed to supply JB may need to buy more...

If someone signed a contract to sell their shares off market but also subsequently sold them on-market then they are technically short selling in the latter trade aren't they?

If the ASX had suspended trading of this stock a long time ago this would all have been made a lot easier - or alternately allow stocks to trade for .001 of a cent instead of just .1 of a cent.

 

[sails]

Re: Someone is accumulating BCSCA

If someone signed a contract to sell their shares off market but also subsequently sold them on-market then they are technically short selling in the latter trade aren't they?

If the ASX had suspended trading of this stock a long time ago this would all have been made a lot easier - or alternately allow stocks to trade for .001 of a cent instead of just .1 of a cent.

I was thinking the same thing that they would technically be short and, again technically, would need to buy to close the short position. Considering they were paid .1c by Macquarie, they would only be out of pocket by fees if they had to buy back at the same price.

But then, if Jim gets those trades reversed, they wouldn't want to be holding more shares again. On the flip side, could be a rather profitable short if Bolton doesn't win However, I doubt it would be allowed...

They would need very good legal advice, that's for sure.

 

[Sunder]

Re: Someone is accumulating BCSCA

What I don't get is - why is it ok to sell the stock on market to purchasers that can't afford to pay the liability, but not ok to sell it off market to purchasers that can't afford to pay?

One's an arms length transaction, the other is not.

I'm not sure why this is so hard for some people to understand? The law looks at both intent and action. When you make a dodgy looking off market transfer to someone who has stood up in the news and said "I don't have 93 million dollars" (or however big it is), then you really do have to question your intent in selling him the shares.

 

[Struzball]

Re: Someone is accumulating BCSCA

then you really do have to question your intent in selling him the shares.

I would imagine your intent is along the lines of standing up and saying "I don't have a million dollars".

 

[Mitsimonsta]

Re: Someone is accumulating BCSCA

I am still at a loss why Macquarie doesn't buy BCSCA up at a massive discount so that they own it all, stump up the cash for the next two installments which they underwrote anyway, and let the thing get built, and roll it into another of their funds until the asset has real value.

They could then sell it off to another fund later on, or possibly even re-float it. I suspect a bit of short-term pain would eventual make a gain for their fundholders.

 

[drsmith]

Re: Someone is accumulating BCSCA

All i know is that the lawyers will be laughing all the way to the bank. Im not willing to comment on contract law in a case like this cause who knows what will happen.

According to the AFR article there was already a 'contract' to buy some of the shares from JB's client offmarket, so if that contract is held up Mac Banks purchases may be invalide. Or as you suggest P, those who are supposed to supply JB may need to buy more...

Macquarie can top up from what's left for sale on the ASX if any of it's purchases are invalidated.

I'd like to know why Macquarie didn't move sooner before it became lawyers at 10 paces. The large number of units for sale at $0.001 on the ASX was always a weak point for Bolton.

 

[drsmith]

Re: Someone is accumulating BCSCA

I am still at a loss why Macquarie doesn't buy BCSCA up at a massive discount so that they own it all, stump up the cash for the next two installments which they underwrote anyway, and let the thing get built, and roll it into another of their funds until the asset has real value.

They could then sell it off to another fund later on, or possibly even re-float it. I suspect a bit of short-term pain would eventual make a gain for their fundholders.

Any part of the upcoming instalment they get from current shareholders is an amount they don't have to contribute themselves. In the current market they would then be in a position to offer a buyback to paying shareholders at a discount (if desired) thereby acquiring those units at a lower overall cost.

 

[cuttlefish]

Re: Someone is accumulating BCSCA

One's an arms length transaction, the other is not.

I'm not sure why this is so hard for some people to understand? The law looks at both intent and action. When you make a dodgy looking off market transfer to someone who has stood up in the news and said "I don't have 93 million dollars" (or however big it is), then you really do have to question your intent in selling him the shares.

Just because the transaction isn't done on the ASX doesn't mean its not an arms length transaction. A transaction brokered by an independant third party I don't see why there is any more obligation to check out the credentials of the buyer than there is when the transaction is done via the ASX. In fact its actually not technically possible to check out whether the buyer has the funds or not - there is no duty for a buyer of shares to disclose their ability or otherwise to pay these instalments - and no obligation on part of the seller to check whether the buyer can. As long as the two parties are acting independantly then it is an arms length transaction in my non-legal, non-accounting ignoramuses opinion.

The ASX is just an exchange - it facilitates easy and efficient exchange and provides various protections for share traders which is why the majority of trading is done via the ASX - but there is no law or obligation for people to trade shares via the ASX if they don't wish to do so and just because they don't it does not mean the transaction is not an arms length transaction.

In this situation the ASX is not providing a mechanism for people to trade the stock at fair market value - as the fair market value is below the technical limits of the price points supported by the ASX and participant brokers systems. The only reason (as far as I can see) that this offer is not being made via the ASX is because the price point is not supported by ASX systems. If the party involved could put a bid on at .01 cent via the ASX systems I'm sure they would have gone that way instead instead of all the hassle hunting down strangers via the share registry.

 

[Sunder]

Re: Someone is accumulating BCSCA

Just because the transaction isn't done on the ASX doesn't mean its not an arms length transaction.

That's correct.

However, when you know the intent the purchaser has, it's no longer arms length.

Remember that this is not saying that it WILL be reversed, only that it MIGHT be reversed.

Now if Bolton's actions are found to be fraudulent, and a court rules that reasonable person would have known at the time that his actions would be fraudulent, then you are in fact a knowing party to fraud - and it is no longer arms length.

If you sold it to Bolton on the ASX on the other hand, you had no idea it was Bolton and that is arms length.

 

[adman0001]

Re: Someone is accumulating BCSCA

However, when you know the intent the purchaser has, it's no longer arms length.

Sunder, did you know what his intent was at the start of the year? Did anyone? Does anyone really know, I mean, REALLY know know what his plan is. There are so much many more plays in this to go yet. And if you owned some, then what would you do? I'm curious.........

 

[Prospector]

Re: Someone is accumulating BCSCA

I do wonder how a judge could determine what a reasonable person would do; and whether Bolton's actions in any way constituted anything illegal. His first purchase was certainly entirely legitimate (although not necessarily wise) Is it illegal to purchase shares in a company to gain a controlling hand to determine its future? Which is really all that Bolton is presumed to have done. Is it up to the seller to ascertain whether the buyer has the means to pay the liabilities? How could 'Joe Blow' do that?

 

[Julia]

Re: Someone is accumulating BCSCA

More addition to the general confusion.
http://business.smh.com.au/business...nt-mess-20090331-9ibx.html?sssdmh=dm16.369337

 

[nomore4s]

Re: Someone is accumulating BCSCA

If the meeting does go ahead it will be pretty nasty, you'd think there will be plenty of emotions from some of the retail investors.