Re: Someone is accumulating BCSCA
Also, Brisconnections/Macquarie would have known the risks of selling partly paid shares to "mum & dad" investors, ie, they may not have the cash to pay the rest...
This is an excellent point - using Sunder's logic - BCS should not have been allowed to issue the stock in the first place without first checking that the original purchasing shareholders could pay (i.e from the original public issue).
There is no encumberance on these instalments, no loan 'against them'. The liabiliity lies with the registered owner at the time the instalment falls due. It could be argued that there is no liability on the instalments until the instalments actually fall due.
Also an arms length transaction to me is any transaction where there is no commercial or personal relationship between the two parties. If the two parties are acting independantly then neither party is responsible for the actions of the other party as far as I can see. If this sort of obligation (to check out the finances of a buyer before selling) is going to be applied, then the same rules should be applied to transactions facilitated via the ASX - i.e. if private sellers have this responsibility to check out buyers credentials then ASX facilitated trades should also carry the same obligation otherwise there is a double standard.
Also Sunder I can't believe you are suggesting someone should elect not to sell their stock to somebody on the basis of comments in a newspaper article
Boy the commercial world would be in a tizz if we got to that sort of stupidity.
If an independant party chooses to make an offer and buy the shares without coersion or any prior relationship with the seller then why should the seller be liable for the purchasers future actions or intents - its a bone fide sale to my mind. (I'm not a lawyer, accountant etc.).
If somene sells a house, and the purchaser lied on their income statment to obtain the bank finance for the purchase, does the seller have any responsibility for this after settlement? Of course not, the whole business world would collapse if this sort of idiocy was introduced.
The reality is that BCS, by putting this product into a publicly traded market place with no audit of who was becoming holders - was simply doing a bad job of managing the 'loans' they made to the original investors. If they were smart they would have restricted/suspended trading in the units at a higher price so that they didn't end up with this situation where they have 'loaned' the instalment payments to people who cannot pay.
BCS doesn't seem willing to take any responsibility for the state of affairs, neither does Macquarie who's brainchild the product was in the first place (and who were happy to offload to unwitting retail buyers last year but now that those buyers have found a voice, they come back in and repurchase a tranche to block those same unwitting investors).