Vote "NO" for shares in Great Southern Plantations
When I invested in Great Southern Tress plantations schemes 2001,2002, 2003,2004 I was told the following
That the investors owned the timber
The investors received 95% of the sale price of the timber
The timber was not harvested until a tree was reached a minimum size (estimated to occur between 10 and 11 years)
We will not need to pay tax on the invested monies until the timber is sold
The forecast although not guaranteed, was published between 6.2% and 10.2% pa return
This forecasts values each $3,000 woodlot between $5,814 and $8,732
Halfway though my investment I am now told
The value is timber is now actually valued by this proposal @ 3597 shares @ 50 cents each being $1,798 (I have investments over the years of 2001, 2002 &2003)
As today’s share price is 32 cents it is now revalued my average woodlot down to $1,150.
This represents a huge penalty of somewhere between 80% and 87% of the original published returns.
If we accept this deal or worst still, if the majority accept this deal, then we all lock in a new value of around 1/6 of the original forecasts
I note KPMG agreed at a fair valuation being the share price of 50 cents compared to the valuation of the timber. Who has valued the timber at this very low dollar level and why should we accept this timber valuation?
Assuming that the timber is truly valued at this new low level then KPMG indicated the deal was ok @ 50 cents, then why would we accept a new valuation, of only 64 % of this dollar amount? (ie today share price, at approx 12 noon on 17/11/2008)
On top of all this, we will be now required, to pay tax, on average, 6 years earlier that our original investment, and for those that invested in more than one financial year then all tax years will be now be rolled into this tax year being 2008-09. Some, if not many of us, may not be retired yet, as per the original timings, so we will pay the tax at a significantly higher tax rate. We also will pay tax, without any related income in the same year.
If you though that this was not bad enough, then many of us will need sell shares to help offset the tax payable and assuming that buyers will be short supply then the share price could fall significantly from the current level. If this event occurs then it will further devalue this mess.
This take over is proposed not by a 3rd party, but by the same organisation that set up this scheme, the same people that indicated tax offsets, positive returns, a fool proof scheme since we the investors owned the timber.
I believe the original scheme was a huge rip off, based on making a select few very wealthy, at the expense of the investors. We are being asked to trust the same people again along with most, if not all, the benefits removed, from the original investors.
Of course management recommend this transition, is in their interest, but not ours.
We all need to vote NO and reject this proposal outright.
Things have got worse during December 2008
Now since I first wrote this the share price has dropped to 12 cents this make a mockery of the indicative returns suggested by the independant experts ranging from 6.2% to 10.2%. The share offer is now worth less than 10% of these indicative figures. Someone please tell me when an indicative return becomes grossly misleading. It is my belief we have well passed this point.
I clearly remember that at the road show (I went to three of them) That we were promised that the trees will not be harvested until they reach a predetermined size. This was estimated to be between 10-11 years. On the Great Southern road show, when asked this question I was informed by Cameron Rhodes That it is in the constitution that they will be harvested between 10-11 years regardless of tree size.
I would like to know why if the trees are only 2/3 of their size why were we told one thing and the constitution another?
I would like a copy of the PowerPoint slide show on the 2001-2004 tree plantation schemes, if any one has one. They were presented to thousands of potential investors and investors in all states of Australia. Their may still be some finnancial planners who have a copy?
I was never told that the accountancy firm and the financial planners received a whopping 10% of all monies invested. I was certainly never told of this by my accountancy firm
Now I am a significant investor and I have lost a lot of money and whilst that is extremely disappointing It is now my belief that The financial numbers never stacked up and rip off schemes such as this need far better scrutiny by ASIC.
If ASIC don't have the powers at present to prevent schemes such as these then, we as a community, need to make sure they have through our polititians
