Equititrust?

[kostag]

Re: Equititrust: another one bites the dust: QUINLIVIN: 2nd MORTGAGES WORTH NOTHING

experience tells us all that when a BANK MOVES as 1stmortgagee, equity dissipates immediately - I will lad with my chin here - I will wager that any second mortgages on raw land in IPSWICH and BUNDALL will have ZIP equity....

both locations are commercial disaster areas.

I under respected insolvency advisors, McGRATH NICHOLLS are running an eye over this

I herd that while Equititrust may have first mortgages on some of the properties owned by Dudley, what made up their LVRs in the disclosure statements was a cross collateralization between those properties that they hold 1st on a others they hold 2nds on. With Westpac moving (as first mortgagee), it will be good to see just how sound Equititrust's security is over Dudley. I think we are in for some impairments here.

 

[kostag]

Re: Equititrust? anyone have any info on this one: Al Constantinidis and David Kenned

anyone have any information on this one. Our sources say that this loan was brokered by BAA-led Ian Lazar, a colourful Sydney financier, who is now in litgation against Equititrust Ltd.

Apparently, Lazar holds some superior security, with the result that Equititrust's $22million loan is at risk.

THIS ARTICLE APPEARED IN THE SMH:-

SMH ARTICLE:
Whose grass is it?...Al Constantinidis and David Kennedy. Illustration: John Shakespeare
Some of the former executives of MFS Limited (aka Octaviar) appear to have developed a keen interest in the turf sector in the two years since the multi-billion dollar implosion of the Gold Coast finance firm.

Far from the white-shoed marinas of Queensland, MFS's former chief operating officer, David Kennedy, has been hard at work lately trying to convince Paul Keating's former piggery business partner, Al Constantinidis, to vacate a 360 hectare turf farm in Windsor.

Seems the estimated $22 million of loans Constantinidis took out from the Mark McIvor-headed Gold Coast finance firm Equititrust have proven to be his Achilles heel.[/I]

Looks like another bad debt brewing!

 

[No Trust]

It All Adds Up

Choice Shonky Award + Frozen Funds For Over 2 Years + Conflict Of Interest + ASIC Intervention + Loan Impairments + 80% Of Loans To Go Into Default + Failed 50M Rescue Capital Raising + Loans to King Con = The Real Equititrust

 

[Garpal Gumnut]

Any news on the alleged posters from the same computer, alleged to be entities associated with Equitytrust, over last weekend.

Have ASIC been on to it?

gg

 

[No Trust]

Equititrust Deception Caught Out

I believe that ASIC are monitoring this thread quite closely in light of recent developments.. I also believe enough people have been shocked by these actions that they will not let it go and will keep pushing the issue with relevant authorities until there is an answer

Of note though, is the fact that a computer normally has one password, its standard practice in terms of security.

As with the loans to Dudley Quinlivan Equititrust are not commenting on areas where they are soft in the underbelly. It takes the media to finally set the record straight, I believe this will be the case in this instance as well..

 

[ASICK]

Re: Equititrust Deception Caught Out

I believe that ASIC are monitoring this thread quite closely in light of recent developments.. I also tnough people have been shocked by these actions that they will not let it go and will keep pushing the issue with relevant authorities until there is an answer. ...

You overrate the corporate undertaker. They hardly take any notice of the press, why should they take any notice of this forum?

Have you read the book "The World According to ASIC: We ARE the World"? (just kidding).

Use of one of more aliases is fine if there is no intention to commit fraud or deceive.

I think members should find it easy to see when a poster is trying to mislead.

"Truth has no agenda".

 

[zencorp]

latest update re: borrowers on Equititrust's website.

 

[Garpal Gumnut]

Re: Equititrust Deception Caught Out

You overrate the corporate undertaker. They hardly take any notice of the press, why should they take any notice of this forum?

Have you read the book "The World According to ASIC: We ARE the World"? (just kidding).

Use of one of more aliases is fine if there is no intention to commit fraud or deceive.

I think members should find it easy to see when a poster is trying to mislead.

"Truth has no agenda".

So many new members, so few posts, and all on the same topic, and all anonymous.

Now that's conspiratorial.

Wouldn't Guy Fawkes have loved it all.

Let's hope it doesn't all blow up in someone's face.

gg

 

[ASICK]

Re: Equititrust Deception Caught Out

So many new members, so few posts, and all on the same topic, and all anonymous.

Now that's conspiratorial.

Wouldn't Guy Fawkes have loved it all.

Let's hope it doesn't all blow up in someone's face.

gg

What's your inference? Why don't you say what you want to say?

 

[No Trust]

Loans to King Con

On my assessment it appears the exposure to Dudley Quinlivan and companies is 68.8M if you follow on from the story in the Courier Mail yesterday.

The major loan over 50M appears to have languished for over 1 year, Equititrust saying they have done a lot of homework on it. What an absolute joke, how much "homework" did McIvor and Co do on this loan to King Con before they put retiree investors’ money at risk.

Seriously what end result did McIvor and the so called credit committee think they would get by dealing an individual like Quinlivan. Loans were made in 2007 yet Quinlivan was named in QLD state Parliament as King Con many years before that.

Now that it is confirmed that Equititrust made these loans they have to become a "developer" to pull their ass out of it. It is an absolute and utter disgrace that a company could be so reckless in dealing with an individual whose abysmal reputation preceded him..

 

[Ruby]

Re: Equititrust Deception Caught Out

I believe that ASIC are monitoring this thread quite closely in light of recent developments..

I wouldn't bet on that! There are many financial services companies on the Gold Coast which are operating blatantly fraudulent businesses, literally stealing clients' money, and ASIC does nothing about them.

Firstly (and I have been told this by an ASIC lawyer), they only act when an official complaint is lodged; they do not go trawling through sites like this and then start investigating what they read. The complainant needs to have hard evidence to support the complaint. Anonymous postings on a forum do not constitute evidence.

Even when you go through all the hoops and provide them with proof of fraudulent activity, there is no guarantee they will act. I know this from personal experience.

ASIC in my view is a paper tiger.

 

[No Trust]

Equititrust Deception Caught Out

The reason I say this, is that I belive a complaint has been made and that reference has been made to this site where the deception occured..

 

[ASICK]

Re: Equititrust Deception Caught Out

The reason I say this, is that I belive a complaint has been made and that reference has been made to this site where the deception occured..

You have to make a formal complaint. Go to the following link and make the complaint:
https://www.edge.asic.gov.au/008/complaintV005?get/complainant/t=4d1751bb93f1fe40d0a5d0a276c7fc78dc33cc

If you want something done, you have to do it yourself.

I don't think it takes a brain surgeon to note that NOBODY uses their real name on this forum - big surprise - we're all anonymous! Aliases are not illegal - except when used to defraud or deceive.

Now, back to Mr. Nuts .. what's your inference? why don't you say what you really want to say? Are you inferring that I'm part of some conspiracy? If you are, then you should come up with the evidence, or if you can't, then you should say 'sorry' and let the matter rest.

 

[Olman]

Re: Equititrust Deception Caught Out

You have to make a formal complaint. Go to the following link and make the complaint:
https://www.edge.asic.gov.au/008/complaintV005?get/complainant/t=4d1751bb93f1fe40d0a5d0a276c7fc78dc33cc

If you want something done, you have to do it yourself.

I don't think it takes a brain surgeon to note that NOBODY uses their real name on this forum - big surprise - we're all anonymous! Aliases are not illegal - except when used to defraud or deceive.

Now, back to Mr. Nuts .. what's your inference? why don't you say what you really want to say? Are you inferring that I'm part of some conspiracy? If you are, then you should come up with the evidence, or if you can't, then you should say 'sorry' and let the matter rest.

Such reason is not welcome here, ASICK. (I'm being facetious. Your cut-throat style takes a bit of getting used to, but the basic thrust shows through).

wait - hear it? - the distant rumble of the rabble scrabbling about to collect their wits to formulate a deluge of type to drown out any dissent to the collective nonsensus of this thread .....

The volume of response is about to rise. Equititrust has published more info on their web site, outlining the current loan details and prospects for recovery. There will be a predictable outcry about valuation dates, and who owes what to whom, from the eggspurts. I see the release as a reasonable attempt to inform investors of the current state of play. There are no guarantees, but absolute chaos is not yet upon us.

 

[ASICK]

Re: Equititrust Deception Caught Out

Such reason is not welcome here, ASICK. (I'm being facetious. Your cut-throat style takes a bit of getting used to, but the basic thrust shows through). ...

amended: from the fund update
".. It’s worth noting that, as indicated in previous investor updates, Equititrust has also absorbed over $30m in impairments across the loan book in the past three financial years. These impairments were funded by other investments and from Equititrust’s yield on the subordinated Capital Warranty investment. Whilst it was not necessary for us to absorb these impairments – they could have been offset against the subordinated investment units – we do not believe that this would have been consistent with our investment philosophy that any capital loss is to be first borne by Equititrust to the extent possible. ..."

I can see you're very, very, very pro the manager.. and that's fine .. but my comment has never been about your fund's performance (except to say it had fared quite well to date), rather only about $42m the manager two-stepped out of the fund a very short time before the fund was frozen. The outlook for your fund is a matter for members only - it's their money at risk. Certainly the manager has $42m less at risk now than it did on 1 July 2008.

Why are you so concerned about a link to ASIC's ecomplaint line? It's the perfect mechanism for members to make complaints - and yes, ASIC has to investigate the complaints. ASIC is unlikely to act on complaints aired on this forum. I can tell you that if I was an investor in your fund, then I would raise a concern about the $42m with ASIC (as I would be entitled to do).

I've seen all the promises of managers, and I've seen all the disappointed investors - promises are one thing - return of capital in many cases is quite another thing altogether. If there is a sting, it's always in the tail.

By the way, what is "the basic thurst" which shows thru? (amended)

 

[ASICK]

Re: Equititrust Deception Caught Out

... The volume of response is about to rise. ... There will be a predictable outcry about valuation dates, and who owes what to whom, from the eggspurts. I see the release as a reasonable attempt to inform investors of the current state of play.

Nah.. I'm sure 2008 / 2009 valuations will be just fine. $81.5 valued too high.. no worry, legal advice is being sought ($$$). Lawyers are always happy to see new business.

But I would be a tad concerned about the impairments ... see, the statement the manager makes about offsetting impairments outside of the fund would concern me, because it's not being reported in the fund's accounts .. if it is, then I'm happy to push aside the concern. $30m is a wack of impairment not to show up on the fund's accounts !!!! Is that legal? I guess it is .. but wouldn't you have thought that investors were entitled to know that fund loans were losing money BIG time?

"... Whilst it was not necessary for us to absorb these impairments – they could have been offset against the subordinated investment units – we do not believe that this would have been consistent with our investment philosophy that any capital loss is to be first borne by Equititrust to the extent possible. ..." - "investment philosopy"? how about disclosure?

And now you find out the $40m Capital Warranty is reduced to $28m, a further downhill run of $12m - Total $42m.

Gee, looks more and more like a good move for the manager to do the $42m two-step.

"Timing is everything"

There are no guarantees, but absolute chaos is not yet upon us.

How far away is it?

 

[Olman]

Re: Equititrust Deception Caught Out

amended: from the fund update
".. It’s worth noting that, as indicated in previous investor updates, Equititrust has also absorbed over $30m in impairments across the loan book in the past three financial years. These impairments were funded by other investments and from Equititrust’s yield on the subordinated Capital Warranty investment. Whilst it was not necessary for us to absorb these impairments – they could have been offset against the subordinated investment units – we do not believe that this would have been consistent with our investment philosophy that any capital loss is to be first borne by Equititrust to the extent possible. ..."

I can see you're very, very, very pro the manager.. and that's fine .. but my comment has never been about your fund's performance (except to say it had fared quite well to date), rather only about $42m the manager two-stepped out of the fund a very short time before the fund was frozen. The outlook for your fund is a matter for members only - it's their money at risk. Certainly the manager has $42m less at risk now than it did on 1 July 2008.

Why are you so concerned about a link to ASIC's ecomplaint line? It's the perfect mechanism for members to make complaints - and yes, ASIC has to investigate the complaints. ASIC is unlikely to act on complaints aired on this forum. I can tell you that if I was an investor in your fund, then I would raise a concern about the $42m with ASIC (as I would be entitled to do).

I've seen all the promises of managers, and I've seen all the disappointed investors - promises are one thing - return of capital in many cases is quite another thing altogether. If there is a sting, it's always in the tail.

By the way, what is "the basic thurst" which shows thru? (amended)

Whew - take it easy, mate - with due respect, you are a little touchy.... you have misread the intended meaning of my post. The "basic thrust" which shows through in your posts is attention to detail and realistic comment, even if I don't completely agree with every one of your assumptions. This was a backhanded compliment - I'm sorry you didn't get it, and will try to be more direct in future. I thought the qualification of "facetious", referring to my comment (rather than yours), would be understood, but the complexities of language are many, I suppose.

I'm not so much pro the manager as anti crap. I can see the possibilities of malpractice, but I don't see any hard evidence to date, and the probabilities come down on the side of Equititrust in my opinion.

I'm not concerned at all about ASIC. The holding up of this bogey man is simply wishful thinking. I agree totally with your comments on this.

My understanding of the $42m so-called "side-step" comes from Equititrust's early posts on this thread and further personal communications with the company. I'm not an accountant and have some difficulties with understanding and expression of finer accounting principles and facts. I can relate to your perceptions about the amount - I shared them in the beginnings of this thread, but have reached a personal conclusion from the research I have undertaken and management statements that has satisfied me. I'm genuinely sorry I can't give you a more bricks and mortar response on this one. It will be interesting to see what comes of this issue in the long term.

I understand your comments about promises of managers and disappointed investors, and the sting always being in the end of the tale. My view is that while this has proved many times to be so, there is no proof yet that this is happening with Equititrust. Healthy scepticism is a good thing, but one size does not necessarily fit all. I remain cautiously optimistic at this stage.

No offence meant to you.

cheers.

 

[ASICK]

Dear Olman,

I accept that no offence was intended.

The $42m TWO-STEP: Take into consideration that $30m of holes have been plugged and right before that, the manager switches $42m from ordinary investment to subordinate investment and then redeems that money between 1 July 2008 and the freezing of the fund on 31 October 2010. If that transaction doesn't raise an eyelid, then what would?

DISCLOSURE - I hope that the $30m of impairment plugs have been disclosed in the fund's accounts, because if they were not, I would see such non-disclosure as something I would take the time to make a complaint to ASIC about.

ASIC - we have to rely on ASIC and we have to make formal complaints - there is no other way out. At least we can hope that ASIC will investigate complaints in order to give investors some solace about their respective investements in the fund.

FUND GENERALLY - I didn't see anything good in the lastest disclosure, but then again, I'm a skeptic.

 

[kostag]

Re: Equititrust: LOAN DISCLOSURE

David Kennedy (ie: not OZAB or BUFFETMAN) has posted to the web site a long overdue promised loan analysis.

One of the most worrying aspect of this disclosure is that all of this BAD NEWS was known at the same time as EQUITITRUST trumpeted its new $50M capital raising in December 2010. Thank heavens for this website and ASIC!

Lets deal with some quick numbers.

1. There are 22 loans which represent some $228.9M or 90% of the loan book.

2. Of these, 19 loans out of 22 ($217.9M) are all vacant sites and vacant land.

3. Of these 22 loans, atleast 17 appear to be 'mortgagee in possession' or 'under external administration'

4. Based on 3. above (total of $204.3m) of loans are not paying interest - based on a loan book of some $254.4million - 81% of loan book is not paying interest! so by Equititrust's definition must be in default category. Assuming 10% interest is collected on the remaining $50.1Million of loans - that is $5Million per annum of income to service - the subordinated investment return (Equititrust of $15million) and interest to investors, lets assume 8% per annum on roughly - who knows who much investors are owned - (I'll guess) $200Million - that's $16million a year in interest - so the fund needs atleast $31Million a year in and has about $5million a year in interest income - and this ignores the capital commitment cash outflows that Equititrust must have to some borrowers and or 'distressed' projects.

5. Prudent lenders loan 50% against vacant land or sites - Equititrust seems to be closer to 80%.

6. Only1 loan (loan 22 for $3.3M) appears to be in a CAPITAL CITY - the rest seem to be regional and or remote locations - Ipswich, Mackay, Yamba, South Australia, Windsor......

THIS IS NOT A LOAN BOOK THAT HAS BEEN CAUTIOUSLY OR PRUDENTLY ASSEMBLED OR MANAGED.

 

[ASICK]

I hope these are helpful:

Update, page 4, "... Historically, for most development loans and some commercial loans undertaken by the Fund, we have capitalised interest, as this is the nature of the lending performed by the Fund, whereby the interest is included in the loan facility and deducted progressively. Over the past three months, however, we have, with few exceptions, stopped the capitalisation of interest so as to allow the loan to go into default and thus enable Equititrust to take enforcement action for the control of it. ..."

"... Capitalizing interest is usually observed in deferred or insufficient payments, where the interest is carried over to succeeding payment periods ..."
http://www.banks.com.au/tools/glossary/c/capitalising-interest/

I'm puzzled by the manager's statement in the above excerpt because it seems to suggest interest capitalization is a condition of lending which the fund is not contractually bound to. Capitalized interest is a great way to reduce fund's security margin by increasing the debt held about that security. Makes everything look good when it may not necessarily be so (also see "Accrued Interest").

Update, page 4, "... The difficulty with this strategy is that whilst it allows us ultimate control of the borrower’s underlying security for the loan, it does mean that our loans in default percentage has increased substantially and will continue to do so. In effect, the increased percentage is an indicator of our strategic initiatives to take control, and investors should not be alarmed by it. ..."

Don't be alarmed about cash flow drying up - but give some thought to the rising impairments and whether or not the fund will be capable of paying your interest payments.maybe this is one of those times you have to think about capital/interest conundrum? Maybe the manager could have provided members with an assurance about the fund's ability to pay interest to members for the foreseeable future?