BCS - BrisConnections Unit Trusts

[cuttlefish]

Hey, I have got to say I like this option!!!

cheers

I suspect the reason its difficult to implement is there's no easily automated way of putting this in place - knowing about the quantitative value and timing of any potential liabilities attached to products would require someone to manually go through the PDS and then code the rules in for each specific product code that has anything like this associated with it.

What would probably be easier for them to implement would be to provide a warning by way of an alert. From a coding perspective all this would require is for someone to maintain a list of stock codes that arent ordinary FPO and have the software do a check against this list and issue a warning alert where the client acknowledges they've read the PDS before continuing. This wouldn't spell out the exact liability but it would still at least flag to the client that they are buying something a little out of the ordinary that may have other obligations or liabilities attached.

i.e. "This product is not an ordinary fully paid share and may have additional obligations or liabilities attached to it as described in the product disclosure statement. Acknowledge to continue etc."

 

[cuttlefish]

Some more on BCS.

http://www.smh.com.au/small-business/finance/brisconn-hunts-investors-20090824-evwn.html



...The company of 77-year-old Adelaide grandmother Elizabeth Goodwin has been forcibly wound up by BrisConnections after she couldn't pay a $1 million debt...


I'll also never understand this one:

...Some have been lucky because Macquarie Bank, one of the underwriters of the BrisConnections float, bought out those who owned fewer than 50,000 units...

I always thought any offers to purchase ASX stock had to be made equally to all shareholders. There's all sorts of takeover legislation to prevent discrimination against certain subsets of shareholders and to prevent manipulative practices. Since why can MQG suddenly randomly decide to make an offer to one group of shareholders but not others based on an arbitrary holding level?

The whole thing is absolutely bizarre. I'm surprised there aren't holes here that lawyers and regulators couldn't drive a truck through.

 

[Julia]

I've only just caught up with this SMH article.

One point they make is why are they pursuing so determinedly these quite small investors when the underwriters have already made up the shortfall?
It would appear that they are not now owed anything at all?

I guess the terms of the deal with the underwriters would have been that every effort had to be made to extract the money owing and if they do wring it out of some investors they will then refund that to Macquarie, Deutsche etc?

Seems peculiar that they are 'in talks' with an investor who owes just $250K

Bizarre is the right word, Cuttlefish.

 

[stocksontheblock]

I've only just caught up with this SMH article.

One point they make is why are they pursuing so determinedly these quite small investors when the underwriters have already made up the shortfall?
It would appear that they are not now owed anything at all?

I guess the terms of the deal with the underwriters would have been that every effort had to be made to extract the money owing and if they do wring it out of some investors they will then refund that to Macquarie, Deutsche etc?

Seems peculiar that they are 'in talks' with an investor who owes just $250K

Bizarre is the right word, Cuttlefish.

I guess the one thing MQG doesn’t want is to pi*s off any potential big clients, and so the so called 'mum & dad' investor is an easy target????

Yet what I have found interesting about this whole debacle is the number of off the book transactions between individuals, individuals and business groups, and strange offers being made around the place to 'certain' people. How has this been allowed to go on without anybody even asking the basic question: Please explain what you have done, and why you are not in breach of blah blah?

Seems to be just another one of those 'market' business Mickey mouse events that really puts some very unfavourable light on how our markets are regulated and operated.

I don’t for a minute think that peoples own responsibility should be absolved from any of the transactions they made. They should have read the small print, instead of seeing the potential for big $’s before their eyes. Yet, I was under the impression, silly me, that the market was a level playing field, all transactions had to be open and ‘fair’, all parties had equal weighting, however the con-job that BCS is has pretty much put pay to that notion, hasn’t it?

 

[steve999]

Does anybody know if Trevor Rowe has been forced to buy shares in BrisConnections? I recall there was some requirement that part of his wage had to be used to buy shares?

 

[drsmith]

Does anybody know if Trevor Rowe has been forced to buy shares in BrisConnections? I recall there was some requirement that part of his wage had to be used to buy shares?

There is but Section 8.2 of the PDS is not overly specific with the detail.

Another partly paid stock with a nominal price has come up with a somewhat imaginative way to try and deal with Nicholas Bolton as a major shareholder.

http://www.asx.com.au/asxpdf/20090824/pdf/31k8chmwl47ygh.pdf

In short he will have to come up with $10m not to be diluted.

 

[cuttlefish]

There is but Section 8.2 of the PDS is not overly specific with the detail.

Another partly paid stock with a nominal price has come up with a somewhat imaginative way to try and deal with Nicholas Bolton as a major shareholder.

http://www.asx.com.au/asxpdf/20090824/pdf/31k8chmwl47ygh.pdf

In short he will have to come up with $10m not to be diluted.

Pretty unclear from reading that exactly what it means ... I hope they're not about to offer big bundles of 'cheap' partially paid units to their existing shareholders.

I'm hoping what it means is they are offering unit holders a chance to relieve themselves of obligations and get out of their holdings altogether at this price.

 

[drsmith]

I'm hoping what it means is they are offering unit holders a chance to relieve themselves of obligations and get out of their holdings altogether at this price.

That is what it means.

Existing unitholders can either bail out at $0.001, not take up the offer and be left to pay two and a bit cents per unit instead of $0.40 as the final instalment or subscribe for new units under the offer. If they do nothing (second option) they will be horribly diluted but in terms of the final instalment obligation they will largely be out of the poo.

Apart from getting young Nicholas off their back I suspect Brookfield-Multiplex's aim is to privatise the fund. Looking at this I'm suprised the high paid staff of Macquarie and DB didn't consider the same approach.

 

[Knobby22]

That is what it means.

Existing unitholders can either bail out at $0.001, not take up the offer and be left to pay two and a bit cents per unit instead of $0.40 as the final instalment or subscribe for new units under the offer. If they do nothing (second option) they will be horribly diluted but in terms of the final instalment obligation they will largely be out of the poo.

Apart from getting young Nicholas off their back I suspect Brookfield-Multiplex's aim is to privatise the fund. Looking at this I'm suprised the high paid staff of Macquarie and DB didn't consider the same approach.

The press has mentioned privatisation, so I'm sure the wide boys have considered it. Maybe they are worried about how their name will be damaged and they get so much moolah out of the government.
I'm sure they will be getting fees somewhere!
Maybe for setting up the privatisation!

 

[JAB_Charity]

We have been asked 2 questions:

>>[1] Can you please explain to us the charity's rationale for taking all these BrisCon units off the hands of other investors, and now fighting the fight against BrisCon?

ATO asked us the same question and we answered to their satisfaction -- such that we maintain our Deductible Gift Recepient (DGR) status.

As we said to the ATO: The reasons for acquiring BrisConnections Stapled Units by The Julie Anne Barrow Charitable Trust have been stated publicly and consistently on numerous occasions...

Reasons include:

Long-term view of Brisbane Airport Link is positive, based in part on investment information provided by responsible persons of the BrisConnections Management Company Limited.

Views on the complex dynamics in play before the 29 April 2009 second instalment, where the $1 call could have been potentially met by a market re-evaluation of unit fundamentals (driven by the unique, scarce, highly valuable asset: the long-term 45 year toll road concession).

A surplus could have been realised at the Public Auction of the units, held on 5 June 2009.

The Brisbane Airport Link project was well placed for a Privatisation and re-issue to market.

Market Signals of BrisConnections Value:

(i) On 30 March 2009 Macquarie Group Limited purchased 1,429,332 (8.055%) BCSCA units on-market.

(ii) On 15 April 2009 it was announced on the ASX that Leighton Holdings had paid $4.5m for the 77,400,933 (19.84%) voting rights (only) of Australian Style Investments.

(iii) On 21 April 2009 Macquarie Group Limited offered BCSCA unitholders with up to 50,000 of holdings an opportunity to exit the register by 5pm 4 May 2009 without meeting $2 liabilities.

----------------------

>>[2]...Can you please explain to us the charity's rationale for... now fighting the fight against BrisCon?

There are many reasons some of which we cannot as yet reveal for legal strategy, but as per the public records for VIC Federal Court case VID486/2009 we remonstrated against the blunt instrument of Statutory Demand $5.6m said to be owing to BrisCon by drawing attention to the following points:

(A) The BrisCon Trust Constitutions

...state in article 4.9(e) that the Manager "may" set a reserve price at auction as then set out in sub-articles 4.9(e)(a) and 4.9(e)(b)

...when article 5.7(b) of the Underwriting Agreement states that the Manager "will" set a reserve price at auction as then set out in sub-articles 5.7(b)(i) and 5.7(b)(ii).

(B) The BrisCon Trust Constitutions also

...state in sub-article 4.9(e)(a) that the reserve price at auction will be at a price "not exceeding" the amount then set out

...when sub-article 5.7(b)(i) of the Underwriting Agreement states the reserve price at auction will be "equal to" the amount then set out.


Note: "may" is not "will"

...and "not exceeding" is not "equal to" -- even though the destination may end up being the same, the possible journeys are many and varied when you are a prospective BCSCA investor looking forward, and relying on the Investment Constitutions in good faith, as to how a Public Auction ought to be reasonably run.

--------------------

More info on the BrisCon Fightback cases are updating on:

http://www.settlemate.net.au/BrisCon/tabid/57/Default.aspx

Regards,
David

 

[drsmith]

I have not followed this for a while but I note that the BCSCB unit price has moved from the 50's into the 20's.

 

[investorpaul]

I have not followed this for a while but I note that the BCSCB unit price has moved from the 50's into the 20's.

I also keep an eye on the price just out of interest (wouldnt want to touch them with a 10 ft pole).

Unfortunately the lower the price goes the more buyers will have to stump up for the future installment. Because of this recent buyers may be forced to sell on market at a lower price that their buy price. This could create another downward spiral.

 

[drsmith]

Unfortunately the lower the price goes the more buyers will have to stump up for the future installment. Because of this recent buyers may be forced to sell on market at a lower price that their buy price. This could create another downward spiral.

There's been a constant flow of Appendix 3B notices on the ASX so that's what could be happening now.

 

[wonderrman]

Hello, I am wondering if someone could direct me to where I could find the court documents/minutes of the Bolton V BrisConnections case back in March. They have been posted in the thread somewhere but I cannot find them within the 90 or so pages.
Regards, w.

 

[cuttlefish]

We have been asked 2 questions:

>>[1] Can you please explain to us the charity's rationale for taking all these BrisCon units off the hands of other investors, and now fighting the fight against BrisCon?

ATO asked us the same question and we answered to their satisfaction -- such that we maintain our Deductible Gift Recepient (DGR) status.

As we said to the ATO: The reasons for acquiring BrisConnections Stapled Units by The Julie Anne Barrow Charitable Trust have been stated publicly and consistently on numerous occasions...

Reasons include:

Long-term view of Brisbane Airport Link is positive, based in part on investment information provided by responsible persons of the BrisConnections Management Company Limited.

Views on the complex dynamics in play before the 29 April 2009 second instalment, where the $1 call could have been potentially met by a market re-evaluation of unit fundamentals (driven by the unique, scarce, highly valuable asset: the long-term 45 year toll road concession).

A surplus could have been realised at the Public Auction of the units, held on 5 June 2009.

The Brisbane Airport Link project was well placed for a Privatisation and re-issue to market.

Market Signals of BrisConnections Value:

(i) On 30 March 2009 Macquarie Group Limited purchased 1,429,332 (8.055%) BCSCA units on-market.

(ii) On 15 April 2009 it was announced on the ASX that Leighton Holdings had paid $4.5m for the 77,400,933 (19.84%) voting rights (only) of Australian Style Investments.

(iii) On 21 April 2009 Macquarie Group Limited offered BCSCA unitholders with up to 50,000 of holdings an opportunity to exit the register by 5pm 4 May 2009 without meeting $2 liabilities.

----------------------

>>[2]...Can you please explain to us the charity's rationale for... now fighting the fight against BrisCon?

There are many reasons some of which we cannot as yet reveal for legal strategy, but as per the public records for VIC Federal Court case VID486/2009 we remonstrated against the blunt instrument of Statutory Demand $5.6m said to be owing to BrisCon by drawing attention to the following points:

(A) The BrisCon Trust Constitutions

...state in article 4.9(e) that the Manager "may" set a reserve price at auction as then set out in sub-articles 4.9(e)(a) and 4.9(e)(b)

...when article 5.7(b) of the Underwriting Agreement states that the Manager "will" set a reserve price at auction as then set out in sub-articles 5.7(b)(i) and 5.7(b)(ii).

(B) The BrisCon Trust Constitutions also

...state in sub-article 4.9(e)(a) that the reserve price at auction will be at a price "not exceeding" the amount then set out

...when sub-article 5.7(b)(i) of the Underwriting Agreement states the reserve price at auction will be "equal to" the amount then set out.


Note: "may" is not "will"

...and "not exceeding" is not "equal to" -- even though the destination may end up being the same, the possible journeys are many and varied when you are a prospective BCSCA investor looking forward, and relying on the Investment Constitutions in good faith, as to how a Public Auction ought to be reasonably run.

--------------------

More info on the BrisCon Fightback cases are updating on:

http://www.settlemate.net.au/BrisCon/tabid/57/Default.aspx

Regards,
David

David - cheers for the update - it all sounds reasonable to me - but I'm no lawyer!

Good luck with your ongoing endeavours in relation to this.

 

[drsmith]

I note today trades at $0.20 and bid/offer is now $0.10/$0.20.

Slowly but surely it's heading for the same place as BCSCA.

 

[Macca09]

Hello, I am wondering if someone could direct me to where I could find the court documents/minutes of the Bolton V BrisConnections case back in March. They have been posted in the thread somewhere but I cannot find them within the 90 or so pages.
Regards, w.

The judgement can be found at: austlii.edu.au/au/cases/vic/VSC/2009/128.html

It is a very interesting read if you have all day ......

 

[wonderrman]

The judgement can be found at: austlii.edu.au/au/cases/vic/VSC/2009/128.html

It is a very interesting read if you have all day ......

Yes thank you I found the website about a week again, I pulled up the page. Certainly is very interesting reading through these legal documents.

regards, W.

 

[nathanblack]

from yesterdays herald sun, it would appear mum and dads have or will finally be let off the hook. Macquarie and Co have agreed to take up all forfeited shares and drop legal proceedures.

The continue to chase Nick Bolton, via ASI company.

 

[Julia]

from yesterdays herald sun, it would appear mum and dads have or will finally be let off the hook. Macquarie and Co have agreed to take up all forfeited shares and drop legal proceedures.

The continue to chase Nick Bolton, via ASI company.

I wonder what redress will exist for those investors who did pay up on the installment? It hardly seems fair that their financial situation has been so compromised and others are 'off the hook'.