BCS - BrisConnections Unit Trusts

[Sunder]

Re: Someone is accumulating BCSCA

Gets more & more interesting, Bolton just WON the court case:

http://business.watoday.com.au/business/rebel-bolton-wins-briscon-claim-20090402-9kkn.html

It'd be interesting to see if parties with a vested interest in seeing that the project remains an ongoing concern (primarily Macquarie) have enough stocks to block a motion to wind down.

 

[Sunder]

Re: Someone is accumulating BCSCA

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). ...

Please don't put words in my mouth. I'm not saying that you have to check the solvency or ability to pay for the person you're selling to.

I'm saying the fact that Bolton has gone in the press to already say that he cannot pay the XX Millions but is yet wanting to buy more shares, destroys that arms length, because you know about him and his situation.

If you sell to him, and it's later found that he's commiting insurance fraud, essentially, and you knew that at the time, the sale may be reversed, because you knew.

 

[steve999]

Re: Someone is accumulating BCSCA

I'm saying the fact that Bolton has gone in the press to already say that he cannot pay the XX Millions but is yet wanting to buy more shares, destroys that arms length, because you know about him and his situation.

But doesn't he have an option with somebody to sell those shares before the payments are due?

 

[sails]

Re: Someone is accumulating BCSCA

Please don't put words in my mouth. I'm not saying that you have to check the solvency or ability to pay for the person you're selling to.

I'm saying the fact that Bolton has gone in the press to already say that he cannot pay the XX Millions but is yet wanting to buy more shares, destroys that arms length, because you know about him and his situation.

If you sell to him, and it's later found that he's commiting insurance fraud, essentially, and you knew that at the time, the sale may be reversed, because you knew.

LOL - but that's only half the story that's in the press. How about quoting the rest of the press statements explaining how he planned NOT to become insolvent? Surely, this is a bit different to selling to someone who is definitely going to be or is actually insolvent.

Sunder, sometimes I think you just like to stir - you really do know how to stir up the hornet's nests here
It's either that or you have some financial vested interest even if it is not directly in share / unit holdings - is that so?

EDIT: If the reports are true that Macquarie have bought their units in a $2 shelf company - how does that fit into your interpretation of an arms length transaction?

 

[AlterEgo]

Re: Someone is accumulating BCSCA

I'm saying the fact that Bolton has gone in the press to already say that he cannot pay the XX Millions but is yet wanting to buy more shares, destroys that arms length, because you know about him and his situation.

Makes no difference. Bolton does NOT have any liability to pay XX millions, IF he sells before the installment is due, which he has already arranged to do. OR if he winds the company up. So there is NO LIABILITY on the shares RIGHT NOW, only when, or IF, the installment is ever required to be paid.

 

[cuttlefish]

Re: Someone is accumulating BCSCA

Please don't put words in my mouth. I'm not saying that you have to check the solvency or ability to pay for the person you're selling to.

I'm saying the fact that Bolton has gone in the press to already say that he cannot pay the XX Millions but is yet wanting to buy more shares, destroys that arms length, because you know about him and his situation.

If you sell to him, and it's later found that he's commiting insurance fraud, essentially, and you knew that at the time, the sale may be reversed, because you knew.

You are saying that based on a newspaper article someone should decide whether or not to sell their stock to Bolton - thats just absurd.

Sellers have no more obligation to read newspaper articles about an independant party that wants to purchase their stock than they do to do any financial due dilligence on the purchaser. As long as the purchaser is acting independantly to the buyer and there is no commercial or personal relationship then I can't see where there is any further obligation on the seller in relation to this. (again I'm not a lawyer or accountant).


(disclosure - I don't hold BCSCA).

 

[Absolutely]

Re: Someone is accumulating BCSCA

You are saying that based on a newspaper article someone should decide whether or not to sell their stock to Bolton - thats just absurd.

Sellers have no more obligation to read newspaper articles about an independant party that wants to purchase their stock than they do to do any financial due dilligence on the purchaser. As long as the purchaser is acting independantly to the buyer and there is no commercial or personal relationship then I can't see where there is any further obligation on the seller in relation to this. (again I'm not a lawyer or accountant).


(disclosure - I don't hold BCSCA).

I agree, there's no obligation on a seller to assess or make themselves familiar with the financial position of the purchaser. It's the purchaser who has to fulfil an obligation once the contract is made.

Sunder is talking bollocks.

 

[brty]

Re: Someone is accumulating BCSCA

Sunder,

According to your arguments, it would be illegal to sell to MQG's $2 company because that entity is known to not have the assets required.

I cannot remember one Kerry Packer checking out the financials of Alan Bond before he sold the Nine Network for $1B. Nor do I recall any undoing of the transaction because Bond could not afford it. The words "you only get one Alan Bond in your lifetime" come to mind.

brty

 

[sails]

Re: Someone is accumulating BCSCA

Sunder,

According to your arguments, it would be illegal to sell to MQG's $2 company because that entity is known to not have the assets required....

I don't think Sunder wants to talk about that - but if he does, it will be interesting to see if he justifies something that he might otherwise consider fraudulent.

 

[cuttlefish]

Re: Someone is accumulating BCSCA

Good to see that ASIC is getting involved in this now.

http://business.smh.com.au/business...roup-over-disastrous-float-20090402-9l33.html

I think the results of this could start to get very interesting. The directors of this company appear to have forgotten that one of their primary roles as managers of a business on behalf of the owners (the shareholders/unitholders) is to maximise returns for those owners. To put it subtly, sending shareholders/unitholders into bankruptcy isn't consistent with this goal.

If they liked the business model so much they always had the option of buying up the stock themselves. They also had the option of suspending trading of the stock at a higher price point in order to protect their financing structure.


The arrogant disregard for the situation unwitting purchasers found themselves in, as well as the apparently misleading scare tactics utilised in 'fact sheets' as well as inconsistent information about the way they've communicated the extent of this liability to shareholders is unlikely to gain much public sypathy. I'm critical of ASIC for not getting involved earlier, but history has shown that when ASIC does get involved in a situation they tend not to pull punches if there is evidence of wrongdoings.

Looking forward to seeing how this all unfolds.

 

[Prospector]

Re: Someone is accumulating BCSCA

ASIC at last have started to confirm what many of us here have thought. Just because BCSCA state that something will be enforced, does not mean that it can be enforced. Guess their bully boy tactics and threats dont work with ASIC!

 

[Absolutely]

Re: Someone is accumulating BCSCA

Good to see that ASIC is getting involved in this now.

http://business.smh.com.au/business...roup-over-disastrous-float-20090402-9l33.html

I think the results of this could start to get very interesting. The directors of this company appear to have forgotten that one of their primary roles as managers of a business on behalf of the owners (the shareholders/unitholders) is to maximise returns for those owners. To put it subtly, sending shareholders/unitholders into bankruptcy isn't consistent with this goal.

If they liked the business model so much they always had the option of buying up the stock themselves. They also had the option of suspending trading of the stock at a higher price point in order to protect their financing structure.


The arrogant disregard for the situation unwitting purchasers found themselves in, as well as the apparently misleading scare tactics utilised in 'fact sheets' as well as inconsistent information about the way they've communicated the extent of this liability to shareholders is unlikely to gain much public sypathy. I'm critical of ASIC for not getting involved earlier, but history has shown that when ASIC does get involved in a situation they tend not to pull punches if there is evidence of wrongdoings.

Looking forward to seeing how this all unfolds.

Well said.

I have won some work on the project and if the job stops soon, my company will be out of pocket a few $. However I really don't like the way Brisconnections have handled this whole debacle. There were ways and means of preventing this situation and Brisconnections chose not to act when they clearly needed to. Trevor Rowe has an AM for services to Investment Banking. He should return it now for this dis-service to retail investors, which he has overseen.

 

[cuttlefish]

Re: Someone is accumulating BCSCA

Trevor Rowe has an AM for services to Investment Banking.

Well its certainly been apparent where he sides during this saga!

I have won some work on the project and if the job stops soon, my company will be out of pocket a few $. However I really don't like the way Brisconnections have handled this whole debacle. There were ways and means of preventing this situation and Brisconnections chose not to act when they clearly needed to.

Yes this is the unfortunate result of an inadequate response earlier in the situation. The project itself, which would probably be profitable in the long run and a benefit to the Brisbane community may be suspended or shelved, putting people out of work and causing pain to suppliers and contractors.

There are numerous avenues that could have been taken when it became obvious that the stock price was falling to levels where retail buyers were unlikely to be able to service their instalment commitment. They could also have been far more proactive early on in the piece in communicating the extent of the instalment liability and its binding nature. That may not have 'served' Macquarie very well though.

A well connected person with contacts in banking, government and a seat on the board of the ASX was in a position to take a much more constructive and proactive approach to this situation much earlier in the piece.

 

[sails]

Re: Someone is accumulating BCSCA

Here's a link to the transcript from Lateline Business on bcs last night:
http://www.abc.net.au/lateline/business/items/200904/s2533735.htm

 

[sails]

Re: Someone is accumulating BCSCA

This post https://www.aussiestockforums.com/forums/showthread.php?p=416801#post416801 is an example of the sort of education required by option traders before being allowed to access options online, let alone trade them. It illustrates what I have been going on about in the other thread...

 

[drsmith]

Re: Someone is accumulating BCSCA

ASIC has raised the question as to whether a 50% vote is sufficient for the wind up resolution (today's AFR p43).

 

[Macquack]

Re: Someone is accumulating BCSCA

ASIC has raised the question as to whether a 50% vote is sufficient for the wind up resolution (today's AFR p43).

Dont ASIC know the answer to that question?

I thought it would require at least 75% being a "special resolution" rather than an "extraordinary resolution"

 

[Garpal Gumnut]

Re: Someone is accumulating BCSCA

Any retail investor, so called mums and dads, who has bought a five letter stock such as B C S C A without investigating why it has 5 letters and not the usual three is a mug, unless they have an ulterior motive for doing so.

I have little sympathy for their plight.

BCSCA is a doggie at present.

Assets flow from the lazy or incompetent to the industrious or smart.

Such is life.

gg

 

[Prospector]

Re: Someone is accumulating BCSCA

Except GG, the BCSCA has been a unique 'five letter' share. Never seen anything like it.

1. Most five letter shares dont come with a compulsory Instalment payment later; if you decide not to pay the instalment then it simply lapses (eg FMSOA) and you only lose your initial outlay.
   
2. The project sounded very worthwhile; it was infrastructure in a growth area of Australia. And the case for purchasing into it was excellent, at the IPO!
   
3. However, very quickly the share price fell from $1 to 1 cent. Not a problem usually except at that rate for only $600 you could pick up hundreds of thousands of them. Again, not a problem, except for that Instalment of $1million which you have now accumulated because the price was so low.
   
4. Again, not necessarily a biggie, you would normally sell them. But as soon as all this became more widely known, there were NO BUYERS!
   
5. The global financial crisis - no-one was doing anything much.

Truly a series of unique events. We have already gone into the 'do we or dont we' sympathise with them at ASF but that has long since gone. We have moved on since then.

 

[Struzball]

Re: Someone is accumulating BCSCA

Any retail investor, so called mums and dads, who has bought a five letter stock such as B C S C A without investigating why it has 5 letters and not the usual three is a mug, unless they have an ulterior motive for doing so.

However, this was a stock aimed at mums and dads with it's promised high dividend yield and the nature of the company.

So it was irresponsible of BrisConnections in the first place to put conditions like they did on the stocks.