GTP - Great Southern Plantations

[The Shadow]

So are these guys legit and competent? So far they haven't presented themselves as such. Yes, I'm suspicious of any group telling me they'll act in my best interests. I've heard that before from you know whom.

For your information this group is being run by a one man band accountant(woman actually)!! They have previously advised on and sold GS investments to their clients.

I strongly doubt their ability to muster their muscle to put together and run a co-op of this magnitude and importance!!!!

You would all be better of persuing legal action via MacPherson & Kelly, Dennis & Co or IMF as a more viable alternative.

 

[SDE]

Banks to grab growers' assets

This judgement in re Enironinvest bodes ominously for growers. Essentially the schemes' assets can be taken by the liquidator and used to pay the Banks.

For the purpose of winding up the schemes, I have found that the leases and trees standing on the allotments leased by growers investing in the registered schemes may be dealt with by the scheme liquidator in the winding up process. The trees are scheme property for that purpose and the leases may be terminated under cl 34.4 of the PYEP constitution and the corresponding provisions in the other constitutions.

http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/vic/VSC/2009/33.html?query=environinvest

 

[Forenth]

The above also states:

92 Notwithstanding the attempt to isolate the trees from the definition of scheme property in the scheme documents, the Act does not permit that outcome. The Act defines scheme property and requires the responsible entity to ensure that scheme property is clearly identified as scheme property.
93 Section 9 of the Act defines scheme property:

"scheme property" of a registered scheme means:
(a) contributions of money or money's worth to the scheme; and
(b) money that forms part of the scheme property under provisions of this Act or the ASIC Act; and
(c) money borrowed or raised by the responsible entity for the purposes of the scheme; and
(d) property acquired, directly or indirectly, with, or with the proceeds of, contributions or money referred to in paragraph (a), (b) or (c); and
(e) income and property derived, directly or indirectly, from contributions, money or property referred to in paragraph (a), (b), (c) or (d).


So trees are part of project assets no matter what GTP ever said and can be used to pay costs. It also says:

94 Section 601FC of the Act provides:

(1) In exercising its powers and carrying out its duties, the responsible entity of a registered scheme must:
(i) ensure that scheme property is:
(i) clearly identified as scheme property; and
(ii) held separately from property of the responsible entity and property of any other scheme; and
(j) ensure that the scheme property is valued at regular intervals appropriate to the nature of the property; and
(k) ensure that all payments out of the scheme property are made in accordance with the scheme's constitution and this Act; and...[16]

That's not what GTP said, wrote or otherwise implied to investors. So much for growers rights...

But it also said each project has to be assessed on its viability before any application to be wound up. Earlier projects closer to harvest might squeeze through, but I'm not hopeful of later projects. As to where woodchip sale proceeds go even if harvested... I dunno. Someone, anyone, please tell me I read this wrong!

 

[jiml]

Forenth, you may well be correct. I suspect the banks are of the same view as I estimate the assets are about 75% of the current land (asset) value.

 

[bv2726]

Great Southern in secret share-swap deals, report

This article has just appeared on some sites...it refers to a financial review article.

http://www.businessspectator.com.au/bs.nsf/Article/Great-Southern-in-secret-share-swap-deals-report-pd20090617-T3QYE?OpenDocument

It looks like there were dirty deals for the cattle rustling that GTP did. (Not that this would be a surprise to anyone on this forum).

 

[drsmith]

Great Southern in secret share-swap deals, report

This article has just appeared on some sites...it refers to a financial review article.

http://www.businessspectator.com.au/bs.nsf/Article/Great-Southern-in-secret-share-swap-deals-report-pd20090617-T3QYE?OpenDocument

Dear oh dear!

Tony Boyd from Business Spectator is actually suggesting that

it may well be that the most sensible outcome would be a return to the group's original Project Transform restructuring. Under that plan the MIS agricultural assets were to be transferred to the parent in return for issuing shares to the MIS investors.

http://www.businessspectator.com.au...os-wooden-stake-pd20090617-T43CC?OpenDocument

Double dear oh dear!

 

[Judd]

I believe a triple dear oh dear is in order drsmith.

OK it's tax law but I hope they show some humanity.

http://business.theage.com.au/business/triple-blow-for-scheme-investors-20090617-chv0.html

Triple blow for scheme investors
Stuart Washington
June 18, 2009

INVESTORS who lost millions in the corporate collapses of managed investment schemes Timbercorp and Great Southern face a final indignity — a bill for millions of dollars from the Australian Taxation Office.

Investors may be exposed to Tax Office action because many of the collapsed schemes can no longer carry out their businesses in the way that attracted the favourable tax treatment.

The potential Tax Office interest would represent a triple whammy for investors in the failed schemes.

First, the 18,000 investors in Timbercorp, who paid $1 billion, and the 43,000 investors in Great Southern, who paid $1.8 billion, face the prospect of losing almost all their investments in the two schemes, which collapsed in April and May.

Second, to enhance the tax-effective nature of the schemes, many investors borrowed heavily to invest, with revelations that investors need to pay out $615 million in loans for Great Southern alone.

Third, the Tax Office may rule that the tax deductions made under the schemes are void because the schemes are no longer operating in line with the product ruling they gained for favourable tax treatment.

 

[jiml]

Judd: Humanity, what the ATO?

While we have all been screwed, the cattle investors who had their shares compulsory resumed and then swapped for worthless shares and compounded by a possible ATO ruling, now that is a triple whammy!

 

[The Shadow]

See the following re the Cattle Project:-

http://www.financialstandard.com.au/news/view/26035/

Shadow

 

[david001]

Just in from my new accountant (who has been a strong opponent of agribusiness investments for many years) in relation to my attempted witholding of loan repayments to said bank...well written by a learned gent and unfortunately just adds another kick to my/our guts.

"I refer to your email of 19 June 2009. This is not what you want to hear, but the reality is that you got the up-front tax deduction based on the scheme being one which met tax office MIS guidelines, which related to the scheme having a life of ten years until anticipated timber harvest. Bendigo Bank’s tax point is right in that you were not supposed to on-sell prior to the expected timber harvest.
Regardless as to that issue it is highly likely that the courts will find in favour of Bendigo Bank, which took over the Bank of Adelaide, recovering its debts. I read somewhere recently that it’s owed about $685 million from MIS investors and will have to take legal action against those in loan default to protect its own balance sheet.
I predict that it will pursue a few defaulters in the courts, and the rest will make their interest repayments and or capital repayment. That’s not what you wanted to hear.
Again, I read somewhere that a large proportion of investors had ceased making payments. Bendigo Bank will have the loan documentation to support their case. Unfortunately it will also be able to point out to the courts that in probably every case the investors concerned were advised to take out the loan by their accountants, i.e. they had relevant professional advice.
As usual I’m sorry to be the one that has to point out the negatives, but I expect that the courts will uphold Bendigo Bank’s right to capital and interest payments.
Regards,"

 

[SDE]

By GS's own admission, plantation eucalypt project yields substantially below 250 m3/ha were "generally known and documented within the industry from as early as 2002".

In theses circumstances, was the continuing reference to yields of at least 250 m3/ha in PDS/prospectus for GS plantation projects NOT misleading and deceptive?

http://imagesignal.comsec.com.au/asxdata/20090619/pdf/00962230.pdf

 

[Forenth]

By GS's own admission, plantation eucalypt project yields substantially below 250 m3/ha were "generally known and documented within the industry from as early as 2002".

In theses circumstances, was the continuing reference to yields of at least 250 m3/ha in PDS/prospectus for GS plantation projects NOT misleading and deceptive?

http://imagesignal.comsec.com.au/asxdata/20090619/pdf/00962230.pdf

Interesting letter. Interesting in that John Young sold 7 million shares for $32.5 million some months before the public disclosure that GTP would have to subsidise the returns to the first project. I wonder why he did that? What a fortunate coincidence for him.

As fortunate a coincidence as a company that he can take control of at any moment he chooses just happens to get $25 million of loans for $9 million only 9 days before GTP calls in administrators.

What an extremely fortunate individual.

 

[KJL]

Just in from my new accountant (who has been a strong opponent of agribusiness investments for many years) in relation to my attempted witholding of loan repayments to said bank...well written by a learned gent and unfortunately just adds another kick to my/our guts."

David - don't lose hope or take it as a kick in the guts. The position is, for me, all a matter of interpretation. There are many learned gents out there. They frequently disagree. These disagreements, unresolved, can end up in Court, where more learned gents go toe to toe.

Your new accountant deals only with the simple issue of a right to an income stream. That's fair enough, he (like my wife) is an accountant and that's the sort of issue they consider. However, his note is somewhat light on in terms of knowledge of the situation; he is considering this "do I continue to pay" question in isolation, and his other comments demonstrate he is not fully across this issue or its background - in particular he makes no mention of the potentially misleading conduct of GS (I'm referring to potential non-disclosure of true financial position, which is now well-documented elsewhere) in selling these MIS products - maybe he doesn't know the background, in which case don't base your decision on that opinion!

He assumes BB have acknowledged having to the loans assigned to them. If BB/AB do admit to having had the loans assigned to them, something they currently haven't done, then BB will be on the hook for any such conduct if the loan are set aside and found to be void ab initio. This relates to all payments all growers have made so far - ie BB would need to refund all payments made to growers under the affected schemes. No wonder BB have been somewhat coy on the matter. He also makes a fair amount of other assumptions in his advice, eg "Bendigo Bank will have the loan documentation" - well, my lawyers have asked BB for it and so far they have been unable to produce it! Principally, I would suspect, because BB or AB were not the original lenders - GSFPL were.

Have a look at the Business Spectator article from yesterday (I don't know how to post the link, sorry) which details four law firms acting for about 1000 investors seeking to challenge the loans. Yes BB will need to make provision for it, because it's a potential $615M black hole in their books, but are they really going to sue and pursue 1000+ investors? Or, could this be more like a CBA/Storm or ANZ/Opes scenario?

I believe it's the latter, and this is turning into a PR nightmare for BB, and they need to take this into account when they report to APRA or make their annual report, both of which will make very interesting reading. Maybe you could get in touch with one of those law firms? I believe one of them, Slater & Gordon, are considering litigation funding (ie no win, no fee for you). Your alternative is to roll over and let the banks do their thing, so you can continue paying your loan for an asset you'll probably never see.

If you wish, you can trawl through my posts and see my position on this, but it has not changed throughout. And I still firmly believe this matter is not over by a long shot...

 

[ajw74]

Well my first post, but I've been reading this thread ever since the first lot of Project Transform BS turned up in the mail.

BTW -Thanks to all who have contributed as it has been most helpful.

I'm a year 2000 grower with a very modest investment and no loan.

I do, however, owe them money for insurance...and according to the letter from McGrathNicol that lobbed this week they want me to 'please remit these amounts in accordance with your normal credit terms'....

Well seeing as I only paid the previous year's insurance so I could vote 'no' to PT my normal credit terms are around the 12mth mark. Hope that's fine with them....

But in all seriousness, should I even consider paying them??
Could they exclude me from getting my return (if there ever is one) because of this?

Should I write back with a nice and tersely worded letter asking what exactly it is I am insuring, who owns them and the future return given previous discussions in this thread (forenth etal)......

 

[drsmith]

I'm a year 2000 grower with a very modest investment and no loan.

1) I do, however, owe them money for insurance...and according to the letter from McGrathNicol that lobbed this week they want me to 'please remit these amounts in accordance with your normal credit terms'....

2) Well seeing as I only paid the previous year's insurance so I could vote 'no' to PT my normal credit terms are around the 12mth mark. Hope that's fine with them....

1) What exactly does the insurance cover ?

2) You had to take out insurance to be able to vote on Project Transform ??

 

[mikes]

interesting view/twist on of recent (3.30 pm fri 26 june 2009)announcements re boq/ storm/asic investigation re financial institution practices and agents of the banks which the banks relied on to fulfil the banks regulatory obligations

hold gtpgb - but of no use to me but may be of interest to financially inept non-professional "not fully informed or properly assessed" mis investors who borrowed.

my take is that however if referrals to the mis salespeople or advice was given to the borrowers by the borrowers own legal advisors or accountants advising the borrowers, it is up to the borrowers to target them(and their professional indemnity insurers) if they wish to do so, not the banks who are possibly off the hook.

 

[jiml]

I think Mikes is right: if money is borrowed from banks to fund MIS investments that turns sour, surely that is not the fault of the banks rather the greed of the commission agents more intersted in selling the product than providing good advice to their clients, incompetence on behalf of GTP management and a lack of prudence on behalf of investors. Any borrowing to purchase shares (as I have done) either by way of margin loan or securitised loan has attendant risk. As a number of commentators have argued (eg Edge), investment should be based upon the viability of the enterprise rather than than tax incentives...

 

[ajw74]

1) What exactly does the insurance cover ?

2) You had to take out insurance to be able to vote on Project Transform ??

1) The insurance covers "the current value of the standing timber"

2) Hehe - no I just had to pay my insurance bill to be eligible to vote.

 

[david001]

KJL, I am on board with Dennis and Co. (as of only late last week) as it seems IMF and Macpherson and Kelly are looking into MIS investments NOT involving 2004-5 schemes like mine.
Bendigo have certainly written me letters chasing funds and my local lawyer emailed a .pdf copy of a very harsh letter Macpherson have written [dated 24th June I think] to said bank outlining Macpherson's position for their clients...basically telling Bendigo to hold off!
I hope Dennis and Co. can come through, as I hope the other firms can help other investors...I am due a legal win, being 0 for 4, in legal stoushes over the last few years...ie 0 wins from 4 issues...so will I finally come out on top..time will tell?
Oh yeah, paid D and Co.a tick over $1000...certainly prepared to accept payment and take me on board as a client...but said no further funds to pay...I hope!

 

[Forenth]

It is certainly my opinion that GTP have misled shareholders and investors about almost everything. If not by outright lies then by withholding information or muddying the waters so it can't quite be seen very well. As for the actions of management, there is still profiteering by at least one even though they failed to take action to prevent the collapse, something that seems to have been foreseen by them for several years.

My question, playing devil's advocate, is where will any monies come from even if legal proceedings succeed against GTP? If D & Co or anyone else win then who will pay? After all GTP is insolvent and I'm sure John Young & Co have set up arrangements to shelter themselves from such decisions.

I hope actions do succeed and claims are settled, but where's the money? I'm not from a legal background, do court awarded payments supercede the secured creditors?