South Canterbury Finance Limited [Archive] - Page 7

Enumerate

19-07-2010, 04:36 PM

ts high time the Judiciary woke up and treated white collar crime AS REAL CRIME !!

The judiciary needs no help from you in understanding matter of law, I am sure.

Judgments are only possible when charges are laid and a case presented.

Rickard makes some good points:

http://*************nz.blogspot.com/2010/06/bothered-by-simon-botherway.html

Remember Mr Botherway has been on the board of the SEC when they have been about as effective as a wet bus ticket slapper (without the ticket) on errant financial offenders or preventing offenses in the first place.

So here we have the SFO, of which Botherway is a director, in pursuit of Allan Hubbard for "too much paper in his accounting system" (though that doesn't effect the accuracy of the accounts) and "too little paper in the regulatory compliance" (though this does not seem to have worked in endless other finance companies and funds).

Beagle

19-07-2010, 04:42 PM

Roger ... good one

Put that on the NZO thread and you will be crucified ... wouldn't hink many on that thread would be reading this thread ... they need more thrills

I'll post it if you want

LOL, no thanks i'm too scared to post that on the NZOG thread. Don't wreck their day mate, its bad enough allready.

evilroyrule

19-07-2010, 04:45 PM

She also would not want Balance banned. Free speech is an inconvenient thing.

Sandy knows what he is doing. Hubbard would not be subject to Statutory Management if he didn't. Think about it.[/QUOTE]

best two comments i read today.

minimoke

19-07-2010, 04:46 PM

Fact of the matter is if you benchmark Aorangi against Hanover ... the choice is obvious where most people would prefer to invest.
No of investors: Aorangi ~400. Hanover 13,000. Unless you want to revisit that question with the benefit of hindsight.

And what about benchmarking?
- Did Hanover have a prospectus - well yes it did so theres a plus
- Did Hanover make regular repayments to its investors - I recall they did. On par
- Did Hanover report increase in assets over time - I believe they did.
- Did Hanover do good deeds (yes they did (just ask the Carnivorous Kauri Snail or Stand Tall
- Did Hanover stand behind their investors - well yes they did. There was $10m a piece on the table while AH had $40m.
- Did Hanover do Related Party transactions. Just like Aorangi - they did.
- Did Hanover appeal to the aged and those requiring regular income. Another "Yes"
- Was Hanover fronted a man the people could trust. Of course, yes.
- Did Hanover file consolidated accounts. No they didn't - and I don't think Aorangi did either.
- Did punters accept at face value what Hanover had on offer. Why yes - just like Aorangi.
- Did Hotchin and Watson hide from media glare (when asked about their Accounts). Yes they did. Just like AH - both were a tad adverse to media of a certain kind.

and digressing for a moment - did Hanover need investor funds as its life blood - yes: just like SCF.

- Did Hanover invest in Property Yes it did (or at least so the Aorangi investors thought) Again on Par with Aorangi
- What did Hotchin say when asked to produce accounts. "Hanover is a private company and not required to publicly report its financial results" Sound familiar?
- And familiar sounding themes? Take the purchase of a photocopier through Ubix which was funded by United. A trail of loans not dissimilar to the farm loans of Aorangi.
- Hanover, like AH had surplus cash that could be moved from one company to another.
- Did Hanover have independent directors - notice a theme here Enumerate?

Anything else you'd like to benchmark?

winner69

19-07-2010, 04:47 PM

Darren Rickard .... Sharetraders BONGO ... remember him from years past?

Wonder if Darren really wrote that?

winner69

19-07-2010, 04:59 PM

Emunerate.... may I with respect suggest you go to www.standard.org.nz

Must be something there to interest you whcih you could post here

Silverlight

19-07-2010, 05:06 PM

winner69

19-07-2010, 05:14 PM

which Botherway is a director[/U],

??????????????

Beagle

19-07-2010, 05:19 PM

Off Topic:

NZO 1980: 1.40
NZO 1990: 0.50
NZO 2000: 0.20
NZO 2010: 1.20

Not an NZO holder but they have had multiple cheap rights issues and free options issued along the way, and also share splits, a linear price/ inflation relationship may be a bit simplistic, but it gets across the point I guess...

anyway On Topic

Is this the outcome we are expecting from the Stat Man? And if so what material effect will this have on the viability of SCF?

If Mr Maier is successful with SCF's restructure and survival, then do the SCF debt securities offer a good risk/ return at the current price?

Sorry, I can't recall the share splits or cheap rights issues, perhaps you could post when they occurred. The last options issue was completly worthless, just ask the poor suckers who excercised there's at $1.50 !! Its a long term dog riddled with fleas.

Anyway, I digress, yes sadly I expect another truly pathetic showing fromn the N.Z. Judicial system when AH is found gulity of breeches of the Securities Act.

I have speculated before that SCF will either be owned shortly by Chineese / Asian interests, but there is of course the possibility that Torchlight might see the lightof day as the major shareholder, otherwise the Govt is likely to have to pick up the peices.

I'm sure Enumerate will be happy to advise on what happens if all the stars happen to come to allignment for SCF. The rest of us would probably prefer to place our money on a single number on the roulette wheel down at the Casino, (better odds and payback ratio).

minimoke

19-07-2010, 05:27 PM

I have speculated before that SCF will either be owned shortly by Chineese / Asian interests, but there is of course the possibility that Torchlight might see the lightof day as the major shareholder, otherwise the Govt is likely to have to pick up the peices.

Since the Chinese have just picked up a $82m stake in Synlait which is just down the road from SCF then there might be some substance to your speculation. They could be up for securing the whole supply chain - which should see some movement on LPC as well.

Balance

19-07-2010, 06:05 PM

Since the Chinese have just picked up a $82m stake in Synlait which is just down the road from SCF then there might be some substance to your speculation. They could be up for securing the whole supply chain - which should see some movement on LPC as well.

I cannot think of any financial institution bought by the Chinese in Australasia - that''s not what they are interested in.

Notice how just about every company which is in difficulties is 'talking' with Asian/Chinese interests? Used to be the Arabs. Before them, the Japanese. Before them, the Americans etc.

Heritage Gold last year pulled a lovely one - in discussions with Chinese interests to JV. The market lapped it up and happily supported a capital raising at 3.5c. Today its sp is 2.4c and they are still in discussions!

I can see the Chinese being interested in buying dairy farms in receivership/loan default off SCF. SCF itself is a can of worms which they will avoid.

Beagle

19-07-2010, 06:59 PM

I cannot think of any financial institution bought by the Chinese in Australasia - that''s not what they are interested in.

Notice how just about every company which is in difficulties is 'talking' with Asian/Chinese interests? Used to be the Arabs. Before them, the Japanese. Before them, the Americans etc.

Heritage Gold last year pulled a lovely one - in discussions with Chinese interests to JV. The market lapped it up and happily supported a capital raising at 3.5c. Today its sp is 2.4c and they are still in discussions!

I can see the Chinese being interested in buying dairy farms in receivership/loan default off SCF. SCF itself is a can of worms which they will avoid.

Yeap, my source reckoned the chances of a capital raising deal being finalised were slim, due to the severity of issues involved, of course Uncle Alan will see everyone right....YEAH RIGHT !!

Balance

19-07-2010, 07:02 PM

Yeap, my source reckoned the chances of a capital raising deal being finalised were slim, due to the severity of issues involved, of course Uncle Alan will see everyone right....YEAH RIGHT !!

LOL - Imagine the march down Timaru and Christchurch in support of Hubbard selling to the Chinese though!

Ably led by a certain gentleman who believes AH does not borrow and if he did, it's all kosher!

Beagle

19-07-2010, 07:14 PM

LOL - Imagine the march down Timaru and Christchurch in support of Hubbard selling to the Chinese though!

Ably led by a certain gentleman who believes AH does not borrow and if he did, it's all kosher!

LOL too funny, cut it out or I'll split my sides with laughter.

Beagle

19-07-2010, 07:36 PM

by andyh | 18 Jul 10, 4:35pm
I shouldn't preen yourself to
0 points I shouldn't preen yourself to much if I were you. You seem unable to grasp the fundamental problem here. Lets remind ourselves again:

''Grant Thornton warned there was a risk investors owed NZ$96 million may not receive all their money back''.

Never mind this smokescreen about interest payments being made and quarterly statements being issued. The investigators are trying to tell you something that you and the other Hubbard cultists seemingly refuse to accept. That is that these investors PRINCIPLE is now impaired. Ask yourself how that might have happened? Where might the interest payments have been met from? There certainly wasn't much income being generated for Aorangi investors from the interest free loans he was making to friends and associates through the laughably termed 'charitable trusts' was there? Are you really not able to join the dots?

And spare us the chaff that Hubbard will make good from his own funds. He hasn't remotely come close to making SCF whole in the past 12 months (indulging instead in a complex and ineffective shuffling of assets to give the semblance that he was still a multi-millionaire able to 'put things right'). SCF is at death's door and Hubbard has been able to do nothing about it. His latest failure (the 'big third party investor' who was meant to come on board by June 30th) appears an invention of Crafaresque proportions.

I liked this one from the interest.co.nz thread. No prizes for naming the resident Hubbard Cultist on this site !!

Enumerate

19-07-2010, 08:07 PM

Hubbard supporters push bandwagon on to internet

By Anne Gibson (http://www.nzherald.co.nz/anne-gibson/news/headlines.cfm?a_id=39)
4:00 AM Friday Jul 16, 2010

http://media.nzherald.co.nz/webcontent/image/jpg/SCCZEN_150710SPLHubbard01_220x147.JPG Facebook pages include Leave Allan Hubbard Alone, while non-Facebook users are being asked to email support. Photo / Supplied

Thousands of people are showing their support for Timaru businessman Allan Hubbard on the internet.
The 82-year-old is being backed by two Facebook pages as well as a bumper sticker campaign which has reached Britain, an email-based group, and special supporter groups.
Facebook's Leave Allan Hubbard Alone (http://www.facebook.com/home.php?#%21/group.php?gid=126760207363172&ref=search)has more than 4000 members and Help Allan Hubbard (http://www.facebook.com/HelpAllanHubbard?ref=searc) had nearly 700 fans yesterday.
Facebook pictures show Hollywood actor John Wayne as a cowboy on horseback: "When the going gets tough Allan, there's only one man who can sort out these creeps," one of the page's members writes.
Another picture shows a thermometer reading the low political temperature for National in Timaru.
Non-Facebook followers are being asked to email their support to stand.by.hubbard@gmail
Supporters are growing daily and stickers spawned by one of the Facebook campaigns are being distributed by Timaru's Showgrounds Auto Services.
Supporter Rosy Thomas said people not on Facebook can email confidentially. "Please, supporters, pass this on to friends and associates."
In another post, she wrote of Honest Hubbard Supporters.
"Go on a mailing list for updates and for private discussions, strategy, etc," she said.
Lesley Craig of Showgrounds Auto Services said her outlet had quickly distributed an initial 250 bumper stickers with Hubbard's face and a link to Leave Allan Hubbard Alone.
"The second lot was 1000 stickers and most of those are gone," she said. Oamaru signwriter Lance Streeter had paid to have these printed and people throughout New Zealand and in Britain had requested them.
Suzanne Edmonds of Exposing Unacceptable Financial Activities says the Hubbards are innocent and she is regularly posting supportive messages.
"Many people have travelled to Timaru to see Mr and Mrs Hubbard. This is for genuine concern for the Hubbards and with the sake of New Zealand, the country Mr Hubbard has helped build ethically," she wrote on Help Allan Hubbard.
A spokesman for Commerce Minister Simon Power said yesterday Power had "noted the reaction to the appointment of the statutory managers".
The deluge of electronic support expresses parochial sentiment, lashes out at the Government's move against Allan and Jean Hubbard, calls for Serious Fraud Office executives to be run out of town, criticises the Securities Commission's Simon Botherway and posts media articles on the Facebook pages.
A photograph of Hubbard in an armchair with a rug over his knees features prominently on the pages backing the businessman known for carrying a battered briefcase and driving an old VW.
Leave Allan Hubbard Alone has links directly to Prime Minister John Key's email, Power and local National MP Jo Goodhew. Leave Allan Hubbard Alone was established by Rob Clarke of Showgrounds Auto Services and gained 2367 members in its first five days last month.
Loyalty expressed on Facebook remains undented even after the highly critical first report from statutory managers Grant Thornton, released on Tuesday, saying Aorangi Securities investors' money has been frozen.
Tim Clarke, of Russell McVeagh's public law and policy team, confirmed he was acting for the Hubbards and he is expected to try to have their personal funds unfrozen and challenge the process taken to put them into statutory management.

winner69

19-07-2010, 08:18 PM

4,173 members on Leave Allan Hubbard Alone

Amazing this social media

Beagle

19-07-2010, 08:33 PM

Balance

19-07-2010, 09:22 PM

Send them more money to yet another another Trust set up to help the Hubbards, this is just getting more comical the longer it goes on.

Enumerate, my 86 year old father has an old Violin you could borrow and record a sad tune, post a you tube clip with a link, then we could hear your rendition while reading your posts, LOL

LOL - Now you have got me splitting my sides laughing! 'Swing low, swing high' you reckon for the sad tune?

I wonder if one of the dodgy looking characters on the facebook page is our very own resident Hubbard cultist - the one with the tattoo and T-shirt? Would hate to meet him in a dark street - he looks like he has not eaten for days due to some investment in a dodgy interest-free loan?

Enumerate

20-07-2010, 08:38 AM

The woman thinks Hubbard is a genius because she had doubled her money with Hubbard over 12 years? ... Hmm ... rule of 72 says thats only about 6.1% compounded. ... Guess that puts me in the genius category too ... Not sure what category she's in.

Your assumption is that the interest has been compounding. Doubling your capital and paying a market interest rate would be a significant achievement.

minimoke

20-07-2010, 09:02 AM

Your assumption is that the interest has been compounding. Doubling your capital and paying a market interest rate would be a significant achievement.
I take it she is one of Aorangi's "sophisticated" investors. If she says she has doubled her money she'll know what doubling her money means

But she is a person who seems to be relying on the mental agility of a person who can't add to $20 in her head. Mrs H apparently only had $20 in her purse but bought $23 worth of groceries. Mrs H may have thought she had $23 in her purse (just like she and Alan thought there was $<$100m in Aorangi. But unfortunately looks like she was mistaken on that account as well.

Alan3285

20-07-2010, 09:06 AM

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10659911

The woman thinks Hubbard is a genius because she had doubled her money with Hubbard over 12 years? ... Hmm ... rule of 72 says thats only about 6.1% compounded. ... Guess that puts me in the genius category too ... Not sure what category she's in.

Hmmm....

Did she receive any 'income' through the period?

I don't know the answer to that myself, so to be fair and balanced, I'll do two examples - you seem sure that she didn't, hence your 'analysis' I guess:

Option 1)

Invested $100 12 years ago and now worth $200 with no other deposits, withdrawals, or income received.

Return = 6% pa (approx) if we compound annually

Option 2)

Invested $100 12 years ago and now worth $200 with income received of $15 pa.

Return = 18% pa (approx) if we compound annually and assume that income is taken out at the end of each year.

NB: This woud be approx 21% pa if the income were taken at the start of each year.

19% pa would be fantastic.... but then we don't know for sure where that money has been invested through the whole 12 year period - it might be 'average' for the risk, or it might be stellar.

As I said, I don't know what the truth is (possibly it lies somewhere between those two examples), but I think many people here could do with getting some real balance into their thinking.

Alan.

Balance

20-07-2010, 09:22 AM

Alan,

No point making assumptions as there is insufficient information.

One thing to further note - are the accounts of Aorangi audited? The final return will depend on the valuation of the assets. If the accounts are audited, that is still of little comfort - note the massive write-downs in SCF books after auditors were changed.

What is coming across very very clearly is that she is no professional or habitual or astute or high net worth investor. She is helping to indict AH on gross breaches of Securities regulations.

winner69

20-07-2010, 09:27 AM

Alan,

What is coming across very very clearly is that she is no professional or habitual or astute or high net worth investor. She is helping to indict AH on gross breaches of Securities regulations.

And the irony of it all ... according to Facebook friends .... they are paying the bastards to get Allan .... yes the AFO etc are their employees they say

Alan3285

20-07-2010, 09:34 AM

As I said, I don't know what the truth is (possibly it lies somewhere between those two examples), but I think many people here could do with getting some real balance into their thinking.
Alan.

No point making assumptions as there is insufficient information.

Balance,

Speculation is pointless until we know what has actually happened.

Alan.

minimoke

20-07-2010, 09:40 AM

Hmmm....

Did she receive any 'income' through the period?

I don't know the answer to that myself, .
I don't know the answer to that either - but we do know AH's standard approach was to accumulate and reinvest. We also know he did have an exception with some elderly people who relied on a regular income.

On the face of it I thinks its fair to assume that 12 years ago this woman started with $100. When she got her statement last month she had $200. Now to be fair I would presume that is $200 net so taxes have been paid on income generated over that period. So AH has returned her 6% net of tax and fees over that 12 years. Thats probably not bad given the average 6 month term deposit rate over that period was 5.86% gross.

There is a slight problem though - the statement will be based on the value of the recoverable value of the investment funds - its not like having money in the bank. So if the Stat Man is right and some loans are impaired and some loans are ranked behind secured first mortgage and some loans are unsecured we need to apply an impairment to her $200. Say we knock 10% off the value of her personal fund she's now worth $180.

We could also assume the 10% impairment is light. It seems that AH was prepared for a 30% impairment - thats why he has put $40m of his "own" money into a $130m fund. After all it is AH who has said he doesn't want to see people loose their money because hes that kind of man. So if we knock 30% off her $200 turning $100 into $140 over 12 years doesn't seem such a "genius" investment.

peat

20-07-2010, 09:45 AM

Herald article is funny though

: Investments found to be "at risk".

wow stunning revelations indeed.

Dubdee

20-07-2010, 10:32 AM

I assume in the absence of an offer document Alan will be relying on his personal aquaintance with the investors. That is an exemption under the Act

COLIN

20-07-2010, 10:56 AM

Well, I have seen enough of the ugly side of human nature, on this thread, to make me never want to come back to view it again. And yet, I suspect I will. Its probably the phenomenon which is known as "The Fascination of the Horrible." I have noticed that here have even been occasions when there have been more viewers on this thread than on the whole of the NZX sector, which never used to be the case.

I get much more satisfaction - and dollar reward - from spending my time in the ASX section. In parting, let me make one final observation: it is surely one of the greatest of ironies that, even if Aorangi investors should finally opbtain less than 100c in the dollar (and I don't believe they will) their combined losses would pale into insignificance when set against the total losses of investors who have placed their millions in companies which have issued Prospectuses / Investment Statements or whatever, and such individuals - sophisticated or otherwise - have had to face the realities of the loss of all, or virtually all, of their investments. And I am talking about companies which have not been found to be in breach of the securities regulations. I speak from practical experience as, unlike the impression a number of others would like to give, I am prepared to admit my mistakes. I maintain a well-spread portfolio, and accept inevitable losses from time to time, just as I appreciate those occasions when I do seem to get it right - and those occasions are increasingly to be found on the ASX.

It will remain a great mystery to me as to why there has been such an outpouring of hostility and bitterness, on this thread, when there are a host of serious loss situations which are far more deserving of investor wrath. Incredibly, the people who are venting most spleen, here, would appear to have not one dollar at stake in any Hubbard connection, if we are to believe their posts.

minimoke

20-07-2010, 10:58 AM

I assume in the absence of an offer document Alan will be relying on his personal aquaintance with the investors. That is an exemption under the Act
Dubdee, are you referring to the close business association exemption. If so perhaps you're right. Except can AH get over this threshold? " sufficiently closely connected on a personal basis with the issuer that the assumption could be made that they would each have sufficient relevant knowledge of their relative's affairs or the means of readily obtaining that knowledge"

I don't think he'll make it. There are over 400 individual investors. The accountants here will know if 400 clients is a lot or not many to have a close association. But lets say 400 is quite manageable for an accountant - what about an accountant who is single handedly manging one of the countries largest investment companies which even someone with Sandy Maiers background is taking a while to get the hang of - let alone the new auditors who also took ages coming to grips with the accounts. Not something I'd expect some widowed grannie with no alternative means to cash would be able to do.

Alan3285

20-07-2010, 11:31 AM

Dubdee, are you referring to the close business association exemption. If so perhaps you're right. Except can AH get over this threshold? " sufficiently closely connected on a personal basis with the issuer that the assumption could be made that they would each have sufficient relevant knowledge of their relative's affairs or the means of readily obtaining that knowledge"

I don't think he'll make it. There are over 400 individual investors. The accountants here will know if 400 clients is a lot or not many to have a close association. But lets say 400 is quite manageable for an accountant - what about an accountant who is single handedly manging one of the countries largest investment companies which even someone with Sandy Maiers background is taking a while to get the hang of - let alone the new auditors who also took ages coming to grips with the accounts. Not something I'd expect some widowed grannie with no alternative means to cash would be able to do.

This page (http://www.harkness.co.nz/articles/commercial/general-principles-regarding-securities-act-1978-act) contains (one) definition of "close business associate":

"Close business associate" means that there must be a degree of intimacy or "business friendship" between the issuer and the offeree although not necessarily a friendship away from business. The closeness must be sufficient to overcome any inequality which might otherwise be present in the relationship.

How many of the 400 or so Aorangi investors that applies to, I have no way of knowing at this point.

It should be noted, for balance, that not all of the 400 have to be covered under this provision, but for Aorangi to be in compliance with the Securities Act, it would seem that all of them would have to fall under one or more of the expemptions in section 3(2) of the act. If they don't then it would seem to be a technical breach of the provisions of the act, but I am not a lawyer!

Alan.

20-07-2010, 12:05 PM

minimoke

20-07-2010, 12:33 PM

This page (http://www.harkness.co.nz/articles/commercial/general-principles-regarding-securities-act-1978-act) contains (one) definition of "close business associate":

Just for the sake of completeness (and to give Enumerate the citation he often likes) my reference came from Securities Commission v Kiwi Co-operative Dairies Ltd [1995] 3 NZLR 26.
So it seems we are on common ground. The question now arises is: would we expect a qualified accountant in control of or an interest in over 500 entities with at least 400 preferred customers make a "technical" breach. If, say someone like Watson did this might that not be called a "negligent" breach; a "careless" breach" or a "fraudulent breach?.

Alan3285

20-07-2010, 12:47 PM

winner69

20-07-2010, 12:48 PM

.... so taxes have been paid on income generated over that period.

We are as Emunerates signature attests full of 'conjecture' shall we conjecture that the IRD will get involved next!

No way ... thats a conjecture too far and as Colin puts it a horrible thought

Beagle

20-07-2010, 01:00 PM

Just for the sake of completeness (and to give Enumerate the citation he often likes) my reference came from Securities Commission v Kiwi Co-operative Dairies Ltd [1995] 3 NZLR 26.
So it seems we are on common ground. The question now arises is: would we expect a qualified accountant in control of or an interest in over 500 entities with at least 400 preferred customers make a "technical" breach. If, say someone like Watson did this might that not be called a "negligent" breach; a "careless" breach" or a "fraudulent breach?.

There is very little if any case law that I'm aware of defining the issue, that's one of the reasons why the case I had with a side company was settled, cost of a high court case is at least $250,000...people are inclined to settle matters if possible when faced with costs like that.

As an accountant in practice I can reliably tell you there's absolutly no way whatsoever you can have a close business association with 400 people, but hey, I'm not a workaholic superman like AH.

COLIN - Your comment that you believe investors will get all their money back is at odds with the initial SM's report.

4100 odd facebook supporters......let me see $136m / 4100 = average interest free loan of $33,170. I'd liike to buy a modest boat, where can I get my $33,000 interest free loan ?

The other point is clearly the complainant feels strongly enough that they should have the protection the Securities Act affords, and it only takes one, for the whole offer to be illegal, personally I think there's a lot more than one.

Balance - Yeah that tune will do nicely mate.

minimoke

20-07-2010, 01:12 PM

I don't know - what do you think?
I don't think you become one of the country's wealthiest men by being "careless". Thats kinda counter-intuitive

I don't think you can be a professional accountant running many companies and be "negligent". A"professional" accountant would, I'd have thought, been answerable to his professional body and I've noted NZICA has been silent on this matter. Additionally no-one seems to be pursuing any actions of negligence - so a "negligent" breach seems unlikely.

Of the options I've provided that only leaves "fraudulent" so best someone gives me some more options.

Another question too: If someone tells you that they are exempt under the Securites Act s3(2), does that mean that you can believe them and are covered, or do you have to make your own inquiries?
If I am a poor Granny and the person is a professional accountant I rely on their expertise and do not make my own inquiries. I'm poor so I can't afford a newspaper to read those apparently informative articles in the Herald and the wireless goes a bit Phutt when those dull people in suits get to the microphone. But when Marge and I get our Blue rinse done at Chloes she reckons I'm onto a good thing.

If I am a sophisticated investor I'd be wondering why my money is going into same fund as the Granny so the question probably wouldn't arise. I didn't get to where I am today by following the Grannies!

Dubdee

20-07-2010, 01:39 PM

Alan3285

20-07-2010, 01:51 PM

Colin,
I think why there is so much passion here is that investors are not expecting any capital variability on debt. People expected the return on and return of their capital, without loss. That of course is naive but mum and dad who invested in those products and who have now lost some or all of their capital feel bretrayed.

They always considered the equity markets Russian roulette so there hasnt been the whinging about losses there, even though these have been severe.Eg Feltex

I think that's probably correct.

For those of us who buy debt securities on market, there is no expectation of a fixed value for the nominal values we hold, but for someone 'putting cash into a fund' or even those who buy debt securities when they are issued, it does seem likely that they view things differently.

Alan.

Beagle

20-07-2010, 03:04 PM

I think that's probably correct.

For those of us who buy debt securities on market, there is no expectation of a fixed value for the nominal values we hold, but for someone 'putting cash into a fund' or even those who buy debt securities when they are issued, it does seem likely that they view things differently.

Alan.

Therein lies the rub. Tell people who originally invested in the preference shares for the full $1.00 and they're now worth 14 cents that Uncle Alan will look after them and see them right !!

Fact is Lachie McLeod under AH's directorship, off his own authority, (he was solely able to approve loans over $1m, (source 2009 annual report), wrote some truly appalling loans in the latter part of the decade, and continuing on even though it was abundently clear that the world had changed forever with the on-set of the GFC in August 2007. Lachie sold the company down the river trying to meet lending targets and improve his personal bonus and all the while under Uncle Alan "legendary" directorship....

After all they had a wall of money coming in as soon as the Govt guarantee started so they had to do something "extremly intelligent" with it right ?

Enumerate

20-07-2010, 03:35 PM

evilroyrule

20-07-2010, 03:53 PM

full stop. move along people. nothing to see here.

Beagle

20-07-2010, 03:59 PM

Roger, is there any truth the rumour that you and Balance are building an aquarium within which you intend to ensconce a "stock picking" octopus?

I'd actually encourage you both in this endeavor because you can't do much worse than if you rely on your "analysis".

Coming from the man who bought SCF pref shares at 30 cents....and replied too by the man who invested in SCF at 10.50% and got his money back in full. The Octopus could certainly out-pick you !!

Alan3285

20-07-2010, 05:02 PM

Coming from the man who bought SCF pref shares at 30 cents....and replied too by the man who invested in SCF at 10.50% and got his money back in full. The Octopus could certainly out-pick you !!

Please can you expand on those references?

BTW, I bought SCFHAs at 23c. Does that make me a genius ;-)

Alan.

Beagle

20-07-2010, 05:08 PM

Please can you expand on those references?
Alan.

What would you like me to expand upon Alan ? I invested at 10.5% in debentures after negotiating an extra rate just before the original GG was imposed, it was a almost a dead cert SCF would get entry into the original scheme back in late 2008, so I took a small punt and invested just before SCF were approved original entry and ended up getting a great return all the way through...can't argue with a 10.5% GG return.

Does that make you a genius investing in SCFHA's at 23 cents ? You'd better consult Paul the Octopus on that one mate.

Alan3285

20-07-2010, 05:37 PM

What would you like me to expand upon Alan ? I invested at 10.5% in debentures after negotiating an extra rate just before the original GG was imposed, it was a almost a dead cert SCF would get entry into the original scheme back in late 2008, so I took a small punt and invested just before SCF were approved original entry and ended up getting a great return all the way through...can't argue with a 10.5% GG return.

Does that make you a genius investing in SCFHA's at 23 cents ? You'd better consult Paul the Octopus on that one mate.

Okay - I just didn't see what you meant about the 10.5%.

What about the 30c reference? They have been there quite recently, but it seems like an arbitary number to pick. They have also been up to about 50c recently I think?

Alan.

Alan3285

20-07-2010, 06:03 PM

Forgive me, I may have started this rumour - enumerate sounded desperate so I said and i quote "So you bought HA's at 30c and now you are getting desperate?"

It was an arbitrary number I picked... my bad - Enumerate is long SCFHA's so up to him if he reveals what price he bought in at.

Ah. I see.

I was very happy with my 23c purchases - doubled my money and sold at 46c last year.

I haven't had any SCF stuff for months now though (sold at the start of March I think).

Alan.

Enumerate

20-07-2010, 06:22 PM

I have been doing a bit of exploring on Facebook.

Allan Hubbard has 4,196 people who like him.

Compare this with John Key, who has 29,330 people who like him.

In terms of celebrity - Tom Jones has 51,003 who like him.

Even Adolf Hitler has 67 people who like him.

You may be surprised to find that the Serious Fraud Office is actually on facebook!

However, like Simon Botherway ... no one likes either of them.

Beagle

20-07-2010, 06:26 PM

Ah. I see.

I was very happy with my 23c purchases - doubled my money and sold at 46c last year.

I haven't had any SCF stuff for months now though (sold at the start of March I think).
Alan.

Very Cunning, double your money, getting out and the most cunning part, staying out. May we presume you think they're going under in due course ?

Jaa

20-07-2010, 06:29 PM

What would you like me to expand upon Alan ? I invested at 10.5% in debentures after negotiating an extra rate just before the original GG was imposed, it was a almost a dead cert SCF would get entry into the original scheme back in late 2008, so I took a small punt and invested just before SCF were approved original entry and ended up getting a great return all the way through...can't argue with a 10.5% GG return.

You could just have bought the SCF020 bonds on market at that time for more than 10.5%, no need for extra negotiation. The term may not have been perfect for you but then you can always sell them. Have never got the appeal of debentures.

Anyone else notice the SCF ads with the eyes suggesting they are worth a look for 8% on Stuff.co.nz and other sites? An effective ad as those things go.

Balance

20-07-2010, 06:56 PM

Colin,
I think why there is so much passion here is that investors are not expecting any capital variability on debt. People expected the return on and return of their capital, without loss. That of course is naive but mum and dad who invested in those products and who have now lost some or all of their capital feel bretrayed.

They always considered the equity markets Russian roulette so there hasnt been the whinging about losses there, even though these have been severe.Eg Feltex

It's because taxpayers are likely to have to bail out hundreds of millions of dollars due to AH's stewardship of SCF.

Enumerate

20-07-2010, 07:53 PM

Balance, is this what you really think ... or is that the clairvoyant octopus talking:

It's because taxpayers are likely to have to bail out hundreds of millions of dollars due to AH's stewardship of SCF.

Finally, let's remember who is putting at risk hundreds of millions of taxpayers' money through the mismanagement of SCF?

For putting hundreds of millions of taxpayers money at risk, YEAH RIGHT.

Disclosure of interest - taxpayer who is cheesed off that we are going to have to pay for AH's mess.

Maybe the right tentacle doesn't know what the 7 left tentacles are doing? That is why it gets repeated so often.

Repetition does not make this correct.

I think you are missing the key part of COLINs post - which Dubdee responded to:

It will remain a great mystery to me as to why there has been such an outpouring of hostility and bitterness, on this thread, when there are a host of serious loss situations which are far more deserving of investor wrath. Incredibly, the people who are venting most spleen, here, would appear to have not one dollar at stake in any Hubbard connection, if we are to believe their posts.

Now this is the "central mystery" of the thread.

Beagle

20-07-2010, 08:02 PM

Originally Posted by COLIN
It will remain a great mystery to me as to why there has been such an outpouring of hostility and bitterness, on this thread, when there are a host of serious loss situations which are far more deserving of investor wrath. Incredibly, the people who are venting most spleen, here, would appear to have not one dollar at stake in any Hubbard connection, if we are to believe their posts.
Now this is the "central mystery" of the thread.

Its current, its could have been avoided with proper management or if Lachie McLeod had the foggiest idea about commercial prudence and its because AH used his VW like a badge, a very cunning marketing trick, right up there with a certain other company using Richard Long as their slight of hand.

Exceptionally cunning subliminal marketing on both counts, so says the Octopus.....

Of course not to forget that there's been a flagrant breech of the Securities Act and then of course there's just the fun at picking holes in all the cultists like yourself just for the sport of it, (not that I would enjoy such a thing of course), LOL.

Will AH see you right if you go down the toilet with your preference shares ?

mouse

20-07-2010, 08:07 PM

The point is that lots of money is at risk with the Govt Guarantee. What makes it worse is that the Govt Guarantee for SCF could have prevented action on other serious problems. Thankfully it has not, but why the Guarantee was extended for SCF in the first place concerns me. I am sure AH is honest, it is his competence that is questioned. A lesson that people should plan to hand on companies when they are still active.

Enumerate

20-07-2010, 08:36 PM

I fully understand that you mean this as a taunt, but here is a serious response:

Will AH see you right if you go down the toilet with your preference shares ?

Not only do I believe that Allan will "see us right" - I believe that he has already "seen us right".

The introduction of Helicopters and Scales - as equity assets - was the major part of the "refloating" of the balance sheet.

Allan Hubbard did not have to do this. He could have walked away - after all the equity value of SCF was less than the various assets he introduced. He could have relied on the government guarantee to "see his investors right". If I have any measure of the man - this thought wouldn't even have crossed his mind.

The SCF balance sheet is not what I am primarily depending on, however. SCF, its customers and the community it serves, is something I have seen before - Percy reminded me of the Smiths City recovery. I was a significant capital note holder, in this company. They saw me right.

I will confess that I am deeply impressed by the integrity and intelligence of Allan Hubbard, the man. The Kipling poem "If" reminds me, in verse, of what I can expect of the man, in life:

If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: 'Hold on!'

It is these combination of factors. The basic financial strength is there, this is not a lost cause. The community is behind this business, there is strength in this. Both Maier and Hubbard clearly have the insight and energy to focus available resources to achieve a significant outcome.

Contrast this with the fear and weakness in the investment community. People who would not raise a finger to warn or prevent $6billion of collapse, now smell blood at SCF. However, I smell their fear. It is a wonderful time to stand up and be counted.

I have not finished buying SCFHA, yet. I acknowledge the significant risk, I acknowledge the doubts. This is another "turn of pitch and toss" - I have been here before many times.

Alan3285

20-07-2010, 08:39 PM

Very Cunning, double your money, getting out and the most cunning part, staying out. May we presume you think they're going under in due course ?

No - I would doubt that, and if the SCFHAs dip down to 10c, I'll probably get back in.

The SCF010 is also looking quite attractive, but I am already fully exposed to the NZ Finance sector elsewhere (ALF010 for example) so I don't want to increase that right now.

There are always opportunities.

Alan.

Alan3285

20-07-2010, 08:41 PM

You could just have bought the SCF020 bonds on market at that time for more than 10.5%, no need for extra negotiation. The term may not have been perfect for you but then you can always sell them. Have never got the appeal of debentures.

For investors who don't really understand finance, debentures appear nice and simple and they think they are 'safe'.

Personally, it would give me the heebie jeebies to have my investments locked up in a debenture for 12 months (say).

Alan.

Beagle

20-07-2010, 09:39 PM

Originally Posted by Jaa
You could just have bought the SCF020 bonds on market at that time for more than 10.5%, no need for extra negotiation. The term may not have been perfect for you but then you can always sell them. Have never got the appeal of debentures.

Actually Jaa, I just checked on the Chart of SCF 020's in Novermber 2008 they were trading in the high 9's yield range and then I would have had to pay brokerage to buy them reducing the net running yield to around 9.5% to me..

Speaking of brokerage the fact that as an investment advisor at the time recommending SCF I earned 0.75% brokerage of them on top of the 10.5% interest rate was a material additional bonus, very tasty indeed and I remember having a free holiday in Australia on that one.

Breastwork

20-07-2010, 09:59 PM

So here we have the SFO, of which Botherway is a director, in pursuit of Allan Hubbard for "too much paper in his accounting system" (though that doesn't effect the accuracy of the accounts) and "too little paper in the regulatory compliance" (though this does not seem to have worked in endless other finance companies and funds).

Enumerate - Don't let the facts get in the way of your little hissy fit. Hope you'll be man enough to apologize for your misinformation.

Balance

20-07-2010, 10:00 PM

This is AH in action - the man who had access to hundreds of millions of dollars guaranteed by taxpayers via SCF in 2008 and 2009.

Related party transactions (rpt) increased by over $200m during that period.

On 30 June 2007, rpt were $69.5m, and shf was $209.8m.
By 30 December 2008 as the GFC bit hard, rpt was $170.2m vs shf of $250.5m.
By 30 December 2009, rpt was $295.7m vs shf of $48m (yes, $48m).

----------------------- AH in ACTION -------------------------------------------

Excerpt : "Mr Hubbard said that's not the case, as the funds were his in the first place. He says he then had them transferred to the trusts ahead of Aorangi issuing a prospectus.
He told Radio New Zealand's business editor he "never borrowed" and it was "always kosher".

SM Report states : ""To date we have seen clear evidence that there is an intricate and complex relationship between the affairs of Aorangi, Te Tua Trust and the affairs of Mr and Mrs Hubbard and other associated entities." ""The level of investments in (including loans to) businesses associated with Mr and Mrs Hubbard without registered security is of concern. Most of these investments are in or to farm businesses that have loans from banks secured by a mortgage over the assets of the farm. This could mean, in the case of direct investments in those farm businesses, that Aorangi would only be paid after the creditors of those businesses were fully paid."

Enumerate

21-07-2010, 08:01 AM

So here we have the SFO, of which Botherway is a director

Should be:

So here we have the SEC, of which Botherway is a director.

Winner69 pointed this out some time ago.

My apology:

Breastwork I apologise that you are having difficulty keeping up with what is posted on the thread. I know it involves reading, and this may be difficult, in some circumstances ... but there is no real way around this. (Unless of course you have a clairvoyant octopus stashed away in an aquarium hideaway).

I would point out that if "misinformation" hurts your ears - then I would say you will have a terribly unpleasant time on this thread (if you engage the logic processing parts of your brain).

Lizard

21-07-2010, 08:39 AM

I will confess that I am deeply impressed by the integrity and intelligence of Allan Hubbard, the man. The Kipling poem "If" reminds me, in verse, of what I can expect of the man, in life:

If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: 'Hold on!'

Perhaps not surprisingly, the same verse that came to mind for me when reading the recent Hubbard publicity. Always loved that poem - though wasn't sure if my gender disqualified me from it...

Beagle

21-07-2010, 09:22 AM

Breastwork I apologise that you are having difficulty keeping up with what is posted on the thread. I know it involves reading, and this may be difficult, in some circumstances ... but there is no real way around this. (Unless of course you have a clairvoyant octopus stashed away in an aquarium hideaway).

I would point out that if "misinformation" hurts your ears - then I would say you will have a terribly unpleasant time on this thread (if you engage the logic processing parts of your brain).
Last edited by Enumerate; Today at 08:04 AM.
LOL, that was amusing.

Enumerate

21-07-2010, 09:52 AM

... though wasn't sure if my gender disqualified me from it...

I don't think that the structure of the chromosomes has any relevance to the higher qualities of the "soul".

Kipling has been much criticised as being an artefact of an imperial age. However, his words are accessible to everyone ...

Apart from the major works ... his "The Song of the Cities" is very frequently quoted (or, actually, misquoted):

Last, loneliest, loveliest, exquisite, apart --
On us, on us the unswerving season smiles,
Who wonder 'mid our fern why men depart
To seek the Happy Isles!

Jaa

21-07-2010, 04:44 PM

Well here's one impairment for the year and what a headline!
http://www.stuff.co.nz/business/industries/3941669/Peas-to-put-tiny-dent-in-14m-debt

Beagle

21-07-2010, 04:57 PM

Well here's one impairment for the year and what a headline!
http://www.stuff.co.nz/business/industries/3941669/Peas-to-put-tiny-dent-in-14m-debt

I predict this is just one of a whole litany of "brilliant" loans Lachie approved that will come out of the woodwork for new 30 June impairements.

Awamoa

21-07-2010, 05:00 PM

Watch TV1 at 7.00 tonight.
It may give some an insight into the real Mr and Mrs Hubbard.

Beagle

21-07-2010, 05:08 PM

Watch TV1 at 7.00 tonight.
It may give some an insight into the real Mr and Mrs Hubbard.

Thanks for that tip, I'll tune in with keen interest.

minimoke

21-07-2010, 05:29 PM

Signing off $14m for peas might have been one of Lachies' Last Legacies.

Alan3285

21-07-2010, 05:48 PM

Well here's one impairment for the year and what a headline!
http://www.stuff.co.nz/business/industries/3941669/Peas-to-put-tiny-dent-in-14m-debt

Interesting timing - Nov 2009!

Things were already 'difficult' for SCF by then, so seems odd that they would actually advance $14m in cash. I wonder if that was actually a rollover of pre-existing loans, becuase if not, it certainly looks like a bad decision irrespective of whether the loans perform or not (which they probably aren't from that article).

Alan.

Dr_Who

21-07-2010, 06:13 PM

AH on Close Up TV1 tonight @ 7pm.

Balance

21-07-2010, 06:30 PM

Thanks for that tip, I'll tune in with keen interest.

It will be more of the PR game of how frugal they have been, the VW they have driven, a few adoring supporters waxing lyrical about how he has helped them etc.

I am very surprised that AH's lawyers have not asked him to keep a low profile as he has been shooting himself in the foot whenever he (and his supporters) opens his mouth.

I guess the lawyers are not confident about getting a judicial review?

One senses that the die is cast and the court of public opinion is where he has been advised to take his review.

Awamoa

21-07-2010, 06:43 PM

It will be more of the PR game of how frugal they have been, the VW they have driven, a few adoring supporters waxing lyrical about how he has helped them etc.

I am very surprised that AH's lawyers have not asked him to keep a low profile as he has been shooting himself in the foot whenever he (and his supporters) opens his mouth.

I guess the lawyers are not confident about getting a judicial review?

Here we go again,making judgement before its even aired.

Balance

21-07-2010, 06:51 PM

Here we go again,making judgement before its even aired.

Well, you can see whether I am right or wrong?

Question for you - "He told Radio New Zealand's business editor he "never borrowed" and it was "always kosher". Who put poor AH up to say something like that on Radio NZ !!!!???

It is so sad.

minimoke

21-07-2010, 06:58 PM

Here we go again,making judgement before its even aired.
Probably not. Since when is there ever any probing or deep interviews in a show at that time slot. Actually when ever are there probing interviews?

Balance

21-07-2010, 08:35 PM

Probably not. Since when is there ever any probing or deep interviews in a show at that time slot. Actually when ever are there probing interviews?

So, any surprises?

As I predicted?

Fascinating on Campbell's Live about the bacteria and coli count in ice and toilet water in MacDonalds, Wendys, Burger King & Sky City. Be careful what and where you drink!

Alan3285

21-07-2010, 08:50 PM

So, any surprises?

As I predicted?

Fascinating on Campbell's Live about the bacteria and coli count in ice and toilet water in MacDonalds, Wendys, Burger King & Sky City. Be careful what and where you drink!

I don't put ice in my drinks at those places - you get less of the drink!

;)

Alan.

Enumerate

21-07-2010, 09:27 PM

The Financial Advisers Act 2008 came into force on the 7th of July.

It would be interesting to understand how both registered and non-registered financial advisers need to regulate their behaviour, especially when dealing with retail clients over the Internet.

For example, there is a basic obligation of disclosure. There is a requirement for any class of financial advisor to provide information associated with certain matters.

The matters are—(a) contact details:

(b) the type of financial adviser:

(c) financial adviser services provided (including financial products in relation to which a financial adviser service is provided):

(d) fees:

(e) material interests, relationships, or associations:

(f) remuneration:

(g) dispute resolution arrangements:

(h) professional or business experience relevant to performance of a financial adviser service:

(i) criminal convictions:

(j) disciplinary proceedings:

(k) adverse findings by a court or the Commission:

(l) bankruptcy or other insolvency proceedings:

(m) indemnity insurance:

(n) matters required to be disclosed by the authorised financial adviser's terms and conditions of authorisation.

It will be interesting to see if a financial adviser posting under an pseudonym on an Internet chat site is required to make disclosure under the Act.

There are a number of significant obligations:

Financial adviser must not engage in misleading or deceptive conduct(1) A financial adviser must not engage in conduct in relation to the provision of a financial adviser service that is misleading or deceptive or likely to mislead or deceive.

(2) A person who knowingly or recklessly contravenes subsection (1) commits an offence (see section 118 (http://www.legislation.govt.nz/act/public/2008/0091/latest/link.aspx?search=ts_act_Financial_resel&p=1&id=DLM1584776#DLM1584776)).

Clearly there a quite a few provisions for obligations in the Act. It would certainly be an interesting case to see if a financial adviser, posting under a pseudonym on the Internet, was required to maintain their obligations under the act.

There is the matter of the financial advisers code:

http://www.financialadvisercode.govt.nz/downloads/draft-code.pdf

Code Standard 2
An AFA must not do anything that would bring the AFA, or financial advisers generally, into disrepute.

There is surprisingly little in the act or code about basic skills. It seems if any idiot can become a financial adviser (and many idiots are):

Financial adviser must exercise care, diligence, and skill

Just as well Roger and Balance are not financial advisers under the act.

Just for safety, I ask that all financial advisers make their minimum statutory declarations before posting.

Balance

21-07-2010, 10:05 PM

I don't put ice in my drinks at those places - you get less of the drink!

;)

Alan.

Good one, Alan!

peat

21-07-2010, 10:29 PM

It seems if any idiot can become a financial adviser (and many idiots are):

Just for safety, I ask that all financial advisers make their minimum statutory declarations before posting.

Hey Enumerate. Not sure that this conversation is relevant to this thread so we could restart it somewhere else but I did actually start a thread on this subject a while back , and my conclusion was that no disclaimer was actually necessary although some disagreed and I'll admit the points are arguable. I suppose one could simply attach a tag like what you do - disclaiming all forum posts from being interpreted as financial advice.

And re the idiocy well I'm doing one of the soon to be legally required qualifications full time this year, a Graduate Diploma in Business Studies endorsed in Personal Financial Planning from Massey University. I wouldnt say that an idiot could pass - its reasonably complex stuff at times especially in the maths side of things
I've only just started the 2nd semester (passed the first 4 papers!) with 4 more to go ,and it seems to be getting harder quite fast.
The regulations are kicking in completely by July 2011 and the legislation is defining a number of qualifications that are acceptable to those wishing to be registered as authorised financial advisors. I cant vouch for the others but this one isnt a walk in the park.
They seem to be gradually watering the legislation down a bit though with some recent redutions in how wide the net swings which is a shame I think I'd rather see it comprehensive now that I'm going to the trouble but also because the whole point of it is to raise the standard.

Enumerate

21-07-2010, 10:49 PM

My "idiot" comment referred to the pre-Act situation in which there were no standards or qualifications required.

I do note your point about the "watering down". Quite significant sections of the Act have been repealed ... mostly around the obligations, surprisingly.

Maybe you could alert the moderator on the post - to have it moved to your established thread.

peat

21-07-2010, 11:02 PM

this is the thread
not too much discussion I dont think people take it too seriously

http://www.sharetrader.co.nz/showthread.php?7662-Liability-and-posting-on-forums-and-the-Financial-Advisers-Act-2008

Balance

22-07-2010, 08:20 AM

http://www.stuff.co.nz/timaru-herald/news/3938657/Hubbard-row-hurts-National

22-07-2010, 08:50 AM

http://www.stuff.co.nz/timaru-herald/news/3938657/Hubbard-row-hurts-National

Questions:

Will those who comment backtrack if a breach is found?? or is was it a lose - lose situation for National.

Does this have anything to do with National - the SFO should be independent to political pressure.

Surely after all the money that has been lost in finance companies, the authorities should be praised for finally taking some action - better late than never.

And finally, why are people giving the Hubbard money (a fighting fund is different but on close up it was reported people are giving them cash in the street). Do they not know they are getting $1k per week which is probably more than most Timarians earn (and NZ'ers - -especially on an after tax basis).

minimoke

22-07-2010, 09:05 AM

Dr_Who

22-07-2010, 11:52 AM

Balance

22-07-2010, 01:29 PM

What would also be interesting would be if AH would meet the threshold of being an Advisor. Though I guess if he's running a little red book and two sets of ledgers theres little concern of him offering advice over the internet.

Since you are concerned about safety may I suggest anyone considering acting on a posting on an internet forum get their head examined - there would clearly be a suspicion of some mental illness.

LOL - obviously some folks here do! The venom one attracts for daring to question the outlandish exuberance of some posters on some stocks (eg. PRC, NZO or ELD) - you would think that their whole investment philiosophies are based on what's written on this site!

Beagle

22-07-2010, 05:40 PM

LOL - obviously some folks here do! The venom one attracts for daring to question the outlandish exuberance of some posters on some stocks (eg. PRC, NZO or ELD) - you would think that their whole investment philiosophies are based on what's written on this site!

LOL Yeah I'm too scared to write what I really think of the appalling track record of PRC and NZO, well on any relevant thread.

By the way, you picked it well on last night's T.V. programme, well done. Just more of the same P.R. from the AH camp...

Really AH should have retired many years ago, Lachie McLeod has really left him in the s#it and with his health problems he couldn't see the wood for the trees regarding the whole GFC...they just kept writing loans like it was business as usual when they should have been proactive and shrunk the balance sheet as the GFC took effect, a classic case of growing old and comfortable and getting side-tracked with health so he forgot to read the tea leaves each morning ?

Balance

22-07-2010, 05:52 PM

LOL Yeah I'm too scared to write what I really think of the appalling track record of PRC and NZO, well on any relevant thread.

By the way, you picked it well on last night's T.V. programme, well done. Just more of the same P.R. from the AH camp...

Really AH should have retired many years ago, Lachie McLeod has really left him in the s#it and with his health problems he couldn't see the wood for the trees regarding the whole GFC...they just kept writing loans like it was business as usual when they should have been proactive and shrunk the balance sheet as the GFC took effect, a classic case of growing old and comfortable and getting side-tracked with health so he forgot to read the tea leaves each morning ?

The truth will come out in the end. National took a bold decision putting AH into SM. The silent majority awaits the truth.

My expectations are that it will show AH trying valiantly to hold SCF and his many business interests together as the GFC hit - hence the huge increase in all the related party transactions over 2008 and 2009. But bad loans are bad loans and bad investments are bad investments. No point throwing in good money after bad.

My gripe remains - I object to taxpayers' money being used to bail out debenture holders in SCF.

Enumerate

22-07-2010, 06:21 PM

The silent majority awaits the truth.

Balance, you remain neither silent nor a majority nor truthful.

I suggest anyone considering acting on a posting on an internet forum get their head examined - there would clearly be a suspicion of some mental illness.

Possibly true - but that is NOT the legislative nor the regulatory framework. You have ignored the point.

Balance

22-07-2010, 07:13 PM

Beagle

22-07-2010, 08:34 PM

An insight into the truth as seen by AH & cultists :

"Mr Hubbard said that's not the case, as the funds were his in the first place. He says he then had them transferred to the trusts ahead of Aorangi issuing a prospectus.
He told Radio New Zealand's business editor he "never borrowed" and it was "always kosher".

SM Report states : ""To date we have seen clear evidence that there is an intricate and complex relationship between the affairs of Aorangi, Te Tua Trust and the affairs of Mr and Mrs Hubbard and other associated entities." ""The level of investments in (including loans to) businesses associated with Mr and Mrs Hubbard without registered security is of concern. Most of these investments are in or to farm businesses that have loans from banks secured by a mortgage over the assets of the farm. This could mean, in the case of direct investments in those farm businesses, that Aorangi would only be paid after the creditors of those businesses were fully paid."

LOL - the above usually brings the cultists scurrying back into their 'interest-free' tents.

LOL indeed. In my experience and i've done this myself to some extent and seen it in other businessmen many other times, when people are really struggling with health or relationship break-up problems their's a high propensity to go into "denial" about their business problems. My observation is this is a profoundy powerful self defense mechanism, sometimes business people just can't cope when all the s#it in the various aspects of their life hits the fan at once...Perhaps old age, health issues and the GFC are a powerful combination for at least a moderate degree of denial ?

There's little question he's tried as hard as he can to keep it all together hence the extremly alarming increase in rpt's you've been alluding too.

Perhaps part of the reason for the SM is AH is in denial that his ordinary shares in SCF are close too, or completly worthless based on a realistic valuation of all receiveables as at 30 June 2010 ? Perhaps this denial has stalled the negotiations regarding new equity coming in, (AH wanting too much for existing equity). Maybe the Treasury by imposing SM and controlling the process have invoked their own self-defense mechanism ?

westerly

22-07-2010, 09:00 PM

I predict this is just one of a whole litany of "brilliant" loans Lachie approved that will come out of the woodwork for new 30 June impairements.

There were 11 companies loaned money to. Only one was put in receivership.
Roger is an acct. and also a financial adviser but what is really scary is that he calls a sidney silkie a dog ?

Westerly

Silverlight

23-07-2010, 10:04 AM

Is there a link to this Radio NZ interview or a full transcript, rather than the 4 words that are being quoted, potentially out of context, thanks.

peat

23-07-2010, 10:29 AM

searching the radionz.co.nz website will reveal the audios
or click this
http://www.radionz.co.nz/search?mode=results&queries_all_query=hubbard

nothing recent though
this is the most recent one from the 15th July
http://podcast.radionz.co.nz/ckpt/ckpt-20100715-1853-Alan_Hubbard_uses_own_money_to_help_investors-048.mp3

Silverlight

23-07-2010, 10:45 AM

Gracious peat, will have to wait until I get home, no headphones at work :p

Beagle

23-07-2010, 12:12 PM

There were 11 companies loaned money to. Only one was put in receivership.
Roger is an acct. and also a financial adviser but what is really scary is that he calls a sidney silkie a dog ?

Westerly

Hi to you Westerly. If they're not a dog, what are they...on second thoughts, don't answer that. Have you got any genuine insights you'd like to share...its easy for ANYONE to sit on the side lines and be critical...If you want to be taken seriously, that won't cut the mustard on this blog mate.....

Balance

23-07-2010, 12:28 PM

Hi to you Westerly. If they're not a dog, what are they...on second thoughts, don't answer that. Have you got any genuine insights you'd like to share...its easy for ANYONE to sit on the side lines and be critical...If you want to be taken seriously, that won't cut the mustard on this blog mate.....

Sobering, isn't it, Roger to have to correct the AH cultists all the time?

Which part of 11 companies under a cross- guarantee do you think that Westerly does not understand?

minimoke

23-07-2010, 12:46 PM

Gracious peat, will have to wait until I get home, no headphones at work :p
I'm not sure you'll find it. The RNZ quote used by Balance is a web page publication relating to a discussion the Mousiness Editor had with AH - I'm not sure that conversation was actually broadcast. What I've heard AH say is not that it was all kosher - but had he been given time he could have got it all kosher. Apparently Docs were being re-written by solicitors ahead of a prospectus release. There was also the case of the elderly lady who put all of her life savings into Aorangi - thats not a sophisticated investor, nor is it something a Financial Advisor should be recommending.

minimoke

23-07-2010, 12:53 PM

We do need people like AH in NZ to support business start ups during the incubation period. Like all venture capital investments, you dont always get it right. The rate of success is very low.

It is extremely difficult to raise capital in NZ for start ups.

Interesting to note that Warren Buffet still lives in the same house he's always been even thou he is worth billions. Interesting ah.
Dr, I don't think the grannies and widows thought they were putting their money into Aorangi so that AH could be an Angel Investor. They thought it was going into first ranked mortgages - and theres a world of difference between the two.

(and i do agree that its hard to raise capital for start ups. But then SCF advertise they put their cash into personal loans, vehicle loans (including jetskis) and farm loans. Apart from the Farm and Business loans it doesn't really mention venture capital loans)

Balance

23-07-2010, 01:15 PM

Dr, I don't think the grannies and widows thought they were putting their money into Aorangi so that AH could be an Angel Investor. They thought it was going into first ranked mortgages - and theres a world of difference between the two.

(and i do agree that its hard to raise capital for start ups. But then SCF advertise they put their cash into personal loans, vehicle loans (including jetskis) and farm loans. Apart from the Farm and Business loans it doesn't really mention venture capital loans)

Been sucked into putting money into start-ups a few times and will never do it again - the big boys get their pound of flesh when they fund start-ups. Not so the average investor.

Beagle

23-07-2010, 01:32 PM

Sobering, isn't it, Roger to have to correct the AH cultists all the time?

Which part of 11 companies under a cross- guarantee do you think that Westerly does not understand?

Even more so that he thinks small dogs are not REAL dogs...enough said. I could write several paragraphs about the pleasure of sitting in front of a roaring fire in winter watching a good movie with your favourite lap dog on your lap, but WAIT !! according to the said gentleman's opinion such simple pleasures are not REAL...but I digress, I think its his understanding of SCF that isn't real.

Just another cultist with his head in the sand, albeit with the twist he likes REAL dog's.

There's another serious wave of impairments to come with the 30 June 2010 accounts, anyone who thinks otherwise has been living under a rock for a very long time or has no idea how the economy or small business works and has tracked over the last six months.

Beagle

23-07-2010, 04:28 PM

http://www.stuff.co.nz/business/3951441/Hubbards-hit-with-covering-costs

Only $1,000 in the first day, how underwhelming is that ?

I'm a little short of inspirational thought today after the rude shock, LOL of having to defend the integrity of my absolutly adoreable dogs...but here's another thought, if you were a smart businessman with over $500m in assets, wouldn't you have at the very very least few hundred thousand, (or more likely a million or three) of that in gold stashed away quietly somewhere, surely ? Should we consult Paul the Octopus and see what it thinks.....

minimoke

23-07-2010, 05:00 PM

http://www.stuff.co.nz/business/3951441/Hubbards-hit-with-covering-costs

Only $1,000 in the first day, how underwhelming is that ?

I find that quite depressingly sad really. Here's a man who you owe your livelihood to (and all the others) and the best you can do is contribute part of $1,000. Perhaps words of support are easy - and clearly cheap.

Beagle

23-07-2010, 06:03 PM

I find that quite depressingly sad really. Here's a man who you owe your livelihood to (and all the others) and the best you can do is contribute part of $1,000. Perhaps words of support are easy - and clearly cheap.

Yeah, all those interest free loans AH is said to have made over the years and he gets a whopping great $1,000 donated to the support AH Trust Fund....either all the supporters words are cheap, (which i suspect is the case) or AH has some of the aforementioned gold stashed away somewhere and doesn't need it.

Now let's get real, donate to yet another Trust for Alan Hubbard, YEAH RIGHT and clearly I'm not the only one thinking this way.

westerly

23-07-2010, 09:00 PM

[QUOTE=Roger;312827]t WAIT !! according to the said gentleman's opinion such simple pleasures are not REAL...but I digress, I think its his understanding of SCF that isn't real.

Just another cultist with his head in the sand, albeit with the twist he likes REAL dog's /QUOTE]

Hi Roger,
Who said I was a gentleman, and who said I like dogs ?
Like Colin in a previous post I find it hard to understand the vitriol displayed by some on this thread and I am fascinated as to what their motives are.
As a holder of scfha's I have some interest in the survival of SCF
Unfortunately like most I can only hold an opinion until the result of the various investigations are published. That opinion is that
there is probably some truth on both sides of the story. However given that the banks wrote off $2.1 billion in 2009 rubbishing the
small investors (the mums,dads,grannies etc so smuggly referred to by the financial wizards) seems a bit ricb.

Westerly

Beagle

24-07-2010, 10:32 AM

http://www.stuff.co.nz/business/industries/3953507/100m-figure-emerges-for-SCF-stake

No doubt Enumerate you will be over the moon with this report and I am sure you will think $100m is more than enough to climb the wall and ensure SCF's survival.

But note, that's $100m for a 80% stake in the good bank and the rumoured buyer isn't interested in the huge wave of new impairments to be annnounced regarding the bad bank, so what does this tell us about what real equity is left in SCF as a consolidated whole ?

Westerly, Suggest you re-read back through this thread, most people have allready clearly outlined their reasons why they find the whole SCF fiasco objectionable.

Enumerate

24-07-2010, 02:31 PM

A new shareholder for South Canterbury Finance could be found within weeks as market sources suggest a private equity investor is ready to stump up $100 million for a majority stake.

The article notes the separation of SCF into the "Good Bank" and the "Bad Bank". The third division is associated with the Equity Assets.

Clearly very positive news for all SCFHA and SCF0x0 holders.

Timing of the deal will likely be after finalisation of the end of year June accounts. We will be in a better position to posit a future SCF restructure once we have the full year accounts.

Further, I note that Maier is demonstrating complete mastery of the psychology of the situation:

... our perception is the market is waiting to see what the next step is. We'll go back into the market when we feel the public perception is right.

I see the local SCF thread bullies have been active on Dr Who and Westerly. Balance, clearly, is only interested in Allan Hubbard character assassination - which is actually only peripherally related to SCF. Roger imagines he has made the case against SCF and is now sitting in judgment. Bandying about unsubstantiated opinion remains an unreliable method for accurate company analysis.

Roll on the full year accounts!

24-07-2010, 03:08 PM

http://www.stuff.co.nz/business/industries/3953507/100m-figure-emerges-for-SCF-stake
But note, that's $100m for a 80% stake in the good bank and the rumoured buyer isn't interested in the huge wave of new impairments to be annnounced regarding the bad bank, so what does this tell us about what real equity is left in SCF as a consolidated whole ?I being overly simplistic but that values that good bank at $25m at the moment.

Clearly very positive news for all SCFHA and SCF0x0 holders.Why?

You say there will be three entities that come out of this , good, bad and equity. Which one will be the surviving entity? If they sell off the good bank, then the equity, you are left with debt in the bad bank which may or may not be insolvent.

Enumerate

24-07-2010, 03:09 PM

No doubt Enumerate you will be over the moon with this report and I am sure you will think $100m is more than enough to climb the wall and ensure SCF's survival.

I may think SCF will survive ... but someone putting in $100m KNOWS SCF will survive.

Enumerate

24-07-2010, 03:24 PM

I being overly simplistic but that values that good bank at $25m at the moment.

How did you arrive at this?

If you followed Basel captial adequacy rules:

$100m to 80% is a total of $125million equity - this can fund a very conservative 8 times 100% - 150% risk weighted assets ("first mortgage" style). Hence the asset value is, as a conservative estimate, is in the range of $750m to $1billion. We have heard Sandy talk about the "Good Bank" being funded by $1billion of debt - so this is consistent.

Why?

Refloating the "Good Bank" with new equity means that the equity assets are no longer required to maintain the capital ratios. This means that they could be traded back to Southbury, for example, thus healing some of the Trust Deed covenants on the ratio of equity assets to total capital.

Further, a refinancing of the "Bad Bank" assets (most likely a sale) removes heavily risk weighted assets from the ledger and adds cash to the capital structure. Very good news for the core ratios.

You say there will be three entities that come out of this , good, bad and equity. Which one will be the surviving entity? If they sell off the good bank, then the equity, you are left with debt in the bad bank which may or may not be insolvent.

There is no question of insolvency. SCF is not insolvent, now - the structural change does not create any insolvent parts.

Danthetitan

24-07-2010, 03:27 PM

I may think SCF will survive ... but someone putting in $100m KNOWS SCF will survive.

And someone who believes SCF's spin knows ... ?

minimoke

24-07-2010, 03:37 PM

Clearly very positive news for all SCFHA and SCF0x0 holders.
....
Roll on the full year accounts!
As I recall the deal was going to be done by AH by the end of June. Then there was speculation the end of July might be more realistic. Sandy has talked about the end of August and we have talk of it being done when th full year accounts are signed off. Holder s will have a while yet to wait.

Enumerate

24-07-2010, 03:47 PM

And someone who believes SCF's spin knows ... ?

Probably the same thing as SCF anti-spin ... they know nothing at all.

That is why I go to the accounts filed in the Companies Office for my primary information. Where do you get your information?

Danthetitan

24-07-2010, 06:57 PM

Probably the same thing as SCF anti-spin ... they know nothing at all.

That is why I go to the accounts filed in the Companies Office for my primary information. Where do you get your information?

I rely on prospectus 60, you know the one that said they were going to raise capital in a 2 stage process with the second stage in March 2010. The assumptions/plans in the accounts in prospectus 61 are about as reliable.

Misc

24-07-2010, 07:39 PM

Was that the esteemed Enumerate on TV3 News tonight? What odds?

M

Enumerate

24-07-2010, 07:57 PM

Was that the esteemed Enumerate on TV3 News tonight? What odds?

http://www.3news.co.nz/Hubbard-supporters-lay-complaint-with-ombudsman/tabid/369/articleID/167246/Default.aspx

Not me ... he is one of the two guys running the facebook page. The TV3 coverage does actually cover some of the broader story.

26-07-2010, 09:36 AM

How did you arrive at this? ...

$100m to 80% is a total of $125million equity .Thanks - so if it has equity of $125m after a $100m injection, then it is currently worth $25. I was referring to equity, not total assets.

Going further, you are saying there is currently $1b of 'assets' supported by $25m of equity. So a 2.5% impairment wipes out the current equity since the debt of $1b stays constant. I admit I dont fully understand Basel so I could have this bit wrong.

Beagle

26-07-2010, 01:44 PM

Thanks - so if it has equity of $125m after a $100m injection, then it is currently worth $25. I was referring to equity, not total assets.

Going further, you are saying there is currently $1b of 'assets' supported by $25m of equity. So a 2.5% impairment wipes out the current equity since the debt of $1b stays constant. I admit I dont fully understand Basel so I could have this bit wrong.

I believe you're on the money mate. There's so many new increases to existing impaired loans that no-one wants the bad bank. Then there's new impairments on the "so called" good bank over the last six months of recession conditions.

Even if a potential purchaser has the balls to buy-in they then have to run the business in, shall we agree, "an extremly challanging environment" facing the near term prospect of no Govt Guarantee...good luck to them and their $100m I reckon they'll need it.

Jonny

26-07-2010, 03:03 PM

Thanks - so if it has equity of $125m after a $100m injection, then it is currently worth $25. I was referring to equity, not total assets.

Its not an injection.. it's proposed as a purchase off 80% of shares

Alan3285

26-07-2010, 04:19 PM

Its not an injection.. it's proposed as a purchase off 80% of shares

Jonny,

If so, then how would that help?

If SCF needs more capital, a sale of shares from one shareholder to another does not, in and of itself, make any difference to SCF?

Any change in ownership seems much more likely to be by way of an issue of new shares.

Alan.

minimoke

26-07-2010, 04:43 PM

Alan3285

26-07-2010, 05:11 PM

I took from Sandy's latest announcement that they are looking at selling 80% of the Good Bank for $100m. He reckons the owner of the Bad Bank would have different ownership characteristics - so they are hunting for two owners. But where would Helicopters. Dairy and Scales go?

Depending on lots of things, I would have thought that they could either go back to Southbury, or even get sold off individually to interested investors / trade players in those industries.

Alan.

GTM 3442

26-07-2010, 06:53 PM

Evenin' all. . . .

The SCF010's are trading round the 23% mark - down somewhat from their recent giddy heights.
And the SCFHA's seem to have stabilised at around 15c.

Anyone got any iseas what this might mean ?

The 010's have a somewhat larger $value turnover than the FA's. . . . . .

Beagle

26-07-2010, 07:32 PM

South Canterbury Finance - We are entering a tense month for SCF management, and investors.

Sandy Maier has 26 business days (and a few long weekends!) to negotiate with potential new owners before a waiver from the trust deed expires on 31 August.

Maier is trying to retain the Good Bank, Bad Bank and Non finance related assets together for the sake of the SCF brand, believing it to have a future. I question whether this value is available for him to defend.

Buyers for the whole of SCF do not appear to exist. There may be several buyers for the parts (Good bank, Helicopters, Scales or Dairy Holdings) but sales of these parts may leave current SCF shareholders and lenders (debentures, bonds) only holding Bad bank.

Remember also that Torchlight has prior access to some of the best assets as collateral for its loan that helped repay the USD facility last year.

The sale of the best parts of the business is surely an unacceptable result for the trustee? It certainly would be for lenders.

Given the risk that the government may become one of those lenders it is hard to imagine them being very tolerant of a plan that sells the jewels (cheaply?) to third parties.

We understand the government refused to issue consent for the capital injection offered by Torchlight earlier this year. I hope they exercise the same rights with any new offer.

In my opinion the likely bidders are not businesses from the finance sector with a desire to rebuild the business. I think the bidders are likely to be trade buyers (Helicopters, Scales, Dairy Holdings) or vulture funds (trying to profit from the sale of SCF good loans).

Neither type of buyers are likely to be interested in the outcome for current lenders.

SCF directors, Maier and SCF's trustee, especially the trustee, need to be single minded in their efforts to protect current, and potential, lenders.

You may note that I haven't asked these people to protect the shareholder, Allan Hubbard. I am quite sure he would concur with the need to protect SCF lenders interest first.

Extract from Chris Lee's article today that might interest some here.

Jonny

26-07-2010, 08:48 PM

Any change in ownership seems much more likely to be by way of an issue of new shares.

Thanks Alan, makes sense..

winner69

27-07-2010, 06:27 AM

Even the great man himself Mike Hosking says Hubbard ain't really done anything wrong .... if Mike says so it must be true

NewstalkZB this morning .... important rave peob on the website already

Jay

27-07-2010, 09:48 AM

minimoke

27-07-2010, 10:35 AM

When are the SM's supposedly going to report something or is it such a complicated web it is like asking how long is a piece of string.
It seems to me the longer it goes on the more extreme each sides viewpoint gets - both sides digging their toes in to say they are right.
Jay, the SM's say, in their first report "There is an intricate and complex intermingling of affairs, which will take some time to work through. We plan to again report on our ongoing detailed investigation work by the middle of August 2010."

Jay

27-07-2010, 11:07 AM

Thanks MM - so another month at least to wait!

minimoke

27-07-2010, 11:55 AM

Thanks MM - so another month at least to wait!
Yes, and an interesting month it will be to!. AH and Aorangi will be waiting for news. And SCF have till the end of August to get their breach sorted - so waiting for news there. Also SCF released their full year results 28 August last year - can they do the same this year? And I think there is an S&P review in there somewhere as well.

Toddy

27-07-2010, 12:20 PM

I believe you're on the money mate. There's so many new increases to existing impaired loans that no-one wants the bad bank. Then there's new impairments on the "so called" good bank over the last six months of recession conditions.

Even if a potential purchaser has the balls to buy-in they then have to run the business in, shall we agree, "an extremly challanging environment" facing the near term prospect of no Govt Guarantee...good luck to them and their $100m I reckon they'll need it.

Sounds like the kind of deal that Allied Farmers may be interested in.

Beagle

27-07-2010, 01:23 PM

Yes, and an interesting month it will be to!. AH and Aorangi will be waiting for news. And SCF have till the end of August to get their breach sorted - so waiting for news there. Also SCF released their full year results 28 August last year - can they do the same this year? And I think there is an S&P review in there somewhere as well.

You're joking right ?

This time they are being properly audited so judging by the the half year release, early April, we could expect to see audited full year financials around early October....if they last that long, opps, did I really say that...

Sounds like the kind of deal that Allied Farmers may be interested in. Toddy
LOL I think they're too busy doing yet another downwards revlauation on Hand-over assets, should that read liabilities ?

minimoke

27-07-2010, 01:45 PM

You're joking right ?

They'll make the end of August no problems. The half year accounts came out in just 2 months. And that was using decent auditors who have already gone through all the slightly iffy loans with a fine tooth comb. In the first few months at the healm Sandy will have put in really robust systems which will give him real time reports on the financial situation of the business - so no delays there. Helicopter and Scales will be dead easy to produce. There are all the old debenture holders who simply rolled over their investments so nothing difficult there. Related Party transactions will have been smoothed out (like we've had Lachie pay back his money) so there will be no jiggery pokery there. AH's capital injection has already been covered and the provisioning has been well flagged. Theres no trickery between Aorangi and SCF so there shouldn't be delays there. And Treasury approved an extension under the Deposit Guarantee on the available professionally prepared accounts. I know they had a slight delay producing the 31 March Interim report - but now those difficulties are out of the way and SCF will have taken NZX's stern warning on board. Nope - I can't see any reason why there should be any delay this year - in fact I reckon they will be even faster - perhaps mid August!

sharer

27-07-2010, 02:41 PM

The first cuckoo of an early spring has chirped this morning!

At 1039hrs NZStdTime SCFHA jumped* to 15.1cents !
And also, another unsatisfied buyer lies in waiting at the same price.
There could be a whole dawn chorus singing any day soon.

*(Alright, maybe just twitched - hard to tell at this stage.)

Beagle

27-07-2010, 05:25 PM

They'll make the end of August no problems. The half year accounts came out in just 2 months. And that was using decent auditors who have already gone through all the slightly iffy loans with a fine tooth comb. In the first few months at the healm Sandy will have put in really robust systems which will give him real time reports on the financial situation of the business - so no delays there. Helicopter and Scales will be dead easy to produce. There are all the old debenture holders who simply rolled over their investments so nothing difficult there. Related Party transactions will have been smoothed out (like we've had Lachie pay back his money) so there will be no jiggery pokery there. AH's capital injection has already been covered and the provisioning has been well flagged. Theres no trickery between Aorangi and SCF so there shouldn't be delays there. And Treasury approved an extension under the Deposit Guarantee on the available professionally prepared accounts. I know they had a slight delay producing the 31 March Interim report - but now those difficulties are out of the way and SCF will have taken NZX's stern warning on board. Nope - I can't see any reason why there should be any delay this year - in fact I reckon they will be even faster - perhaps mid August!

And I just saw a flock of pink pigs fly past my window !!

Mate, lets get real, the whole can of worms is infested with maggots, it'll take the company and the auditors absolutly ages to agree on what new provisioning is required as at 30 June and ditto regarding all the myriad of related party transactions. Fact is it took SCF auditors over three months for the interim audit and the most likely scenario from where I sit, (as an ex auditor), is it'll take them a similar length of time this time, maybe a week or two at best less due to their somewhat familar grip on what are an incredibly complex set of circumstances.

You'll be really lucky if the audited result is out by mid September, mid August is true fantasy land stuff mate.

winner69

27-07-2010, 07:54 PM

They say share transfers over the last few months in Fernside Holdings Ltd make interesting reading

But who are we to speculate the motivation behind all that action .... only conjecture

minimoke

28-07-2010, 07:16 AM

In todays Press Chalkie postulates that AH is now potentially worthless and perhaps bankrupt and suggests SCF go into Statutory Management.

Toddy

28-07-2010, 08:49 AM

In todays Press Chalkie postulates that AH is now potentially worthless and perhaps bankrupt and suggests SCF go into Statutory Management.

A very convincing article. I don't think that this is a reflection of AH's management. Its just reality from the fallout of a massive world wide economic crises that has taken many investors down with it. Unfortunately for AH he does not have time on his side to use all of his years of experience to recover.

winner69

28-07-2010, 09:23 AM

I was in Australia last week and the Aussie papers were full of the coverage of the inquiry into the demise of Babcock of Brown

Bigger scale than AH and SCF but all seemed familair story (spooky in a way) as to what is happening here

Too much leverage and hope that things will come right .... but when the world is against you and the business model is broken than all hell lets lose

And relevant is that decision making and 'judgement' takes on a different meaning

Chalkie prob spot on again .... those who trusted AH the most will lose out and most of those in SCF will get their money back coutesy of you and me

Beagle

28-07-2010, 09:51 AM

I have been seriously questioning whether SCF has any real equity or real worth for some time now...of course Enumerate has been saying for ages everythings Okay..... in fact I'd go further, the pref shares in SCF are completly worthless once all the r.p.t.'s are wound back and all the new loan deliquencies are disclosed, if ever they see the light of day that is...

Its a little known fact that AH loves high gearing, you see it in virtually all his companies, just look at Mercer Stainless or Helicoper's N.Z. Very high leverage and an a GFC on the scale not seen since the last great depression = a recipe for complete failure.

GTM 3442

28-07-2010, 09:55 AM

Where do I get access to Chalkie's article, the Dominion ?

On Stuff:
http://www.stuff.co.nz/business/opinion/3964940/Its-time-to-extend-statutory-management-to-SCF

Beagle

28-07-2010, 10:03 AM

On Stuff:
http://www.stuff.co.nz/business/opinion/3964940/Its-time-to-extend-statutory-management-to-SCF

Cheers. my bad, I just needed a second cup of coffee this morning.....still half asleep

Alan3285

28-07-2010, 10:32 AM

In todays Press Chalkie postulates that AH is now potentially worthless and perhaps bankrupt and suggests SCF go into Statutory Management.

I think Chalkie is right - SCF should be in Stat Mgt too.

Whilst I have serious issues with the lack of transparency throughout the process of putting AH and his wife into Stat Mgt, I think it is very odd and inconsistent to have left SCF outside that process. Also, Sandy Maier has run companies in Stat Mgt in the past I believe, so it wouldn't even necessarilymean that he would have to move on (though he might choose to do so).

Alan.

Beagle

28-07-2010, 11:22 AM

I think Chalkie is right - SCF should be in Stat Mgt too.

Whilst I have serious issues with the lack of transparency throughout the process of putting AH and his wife into Stat Mgt, I think it is very odd and inconsistent to have left SCF outside that process. Also, Sandy Maier has run companies in Stat Mgt in the past I believe, so it wouldn't even necessarilymean that he would have to move on (though he might choose to do so).

Alan.

A managed wind-down would appear to be in everyone's best interests.

Yet the punters are still there for the worthless pref shares, there's going to be tears there, you mark my words. Once the vast web of all related party transactions is fairly marked to current value, likewise tax losses and all the new deliqencies and privisoning is brought to account as well as additional significant provisioning in the bad bank it wouldn't surprise me if there was negative equity of around 100-200 million. Why would any new shareholder buy into this incredible mess when they can pick it up so much cheaper and cleaner in a liquidation or wind down scenario ?

28-07-2010, 01:42 PM

I think Chalkie is right - SCF should be in Stat Mgt too.
Is it not effecively now. the stat manager has control and has opted to keep Sandy in the driving seat.

For the conspiracy theorists out there, stat manager and sandy maier are both SM. Coincidence???

Alan3285

28-07-2010, 02:08 PM

Is it not effecively now. the stat manager has control and has opted to keep Sandy in the driving seat.

For the conspiracy theorists out there, stat manager and sandy maier are both SM. Coincidence???

Yes - I guess you are right, but by that logic, then they only needed to put AH and his wife in Stat Mgt anyway, since that gave them control over all his assets.

Alan.

Beagle

28-07-2010, 03:46 PM

Is it not effecively now. the stat manager has control and has opted to keep Sandy in the driving seat.

For the conspiracy theorists out there, stat manager and sandy maier are both SM. Coincidence???

The independent ran an article I think it was quite early this year where Chalkie thought the director appointments and Sandy Maier's appointment were Govt lead initiatives. It was a ballsey article and hits the nail right on the head just like today's article, still the punters line up for their pref share gamble at 16 cents...what can I say, oh yes, a fool and his money......

Enumerate

28-07-2010, 07:35 PM

... still the punters line up for their pref share gamble at 16 cents...what can I say, oh yes, a fool and his money......

I wonder if you actually read the article.

Chalkie points out that the net equity value, according to his calculations, is $114m - of which the 120m, or so, pref share holders have first dibs. Lets say - 95cents per pref share.

Chalkie does not mention an analysis of the impairments and the likely recovery above the announced impairment levels. I have been over this ... noting the Maier announcement and the likely impact of IFRS accounting rules.

You can lead donkeys to water, but you can't make them drink.

BTW I like Chalkie's style ... but he really needs to look at a bigger picture as to the dynamics of what is happening in SCF.

Roger ... you repeat your "asset impairment" story ... but you have never justified or quantified this in terms of what is known. Repeating this, constantly, does not make it reliable information.

/Disclosure: Perfectly happy as a SCFHA pref holder

Beagle

28-07-2010, 08:50 PM

BTW I like Chalkie's style ... but he really needs to look at a bigger picture as to the dynamics of what is happening in SCF.

Roger ... you repeat your "asset impairment" story ... but you have never justified or quantified this in terms of what is known. Repeating this, constantly, does not make it reliable information.

/Disclosure: Perfectly happy as a SCFHA pref holder

The basis behind my prognosis is quite simple. SCF came out with their take on the half year result in March, the auditors then added about $40 million to that loss before the accounts were finally signed off for audit. Clearly SCF were fighting tooth and nail to keep the write-downs as at 31 December 2009 to the lowest possible level.

I work with small businessmen everyday and know full well that its a real battle out there, especially if one has high gearing, (which I think if one is borrowing from SCF its a fair analysis to say there's a greater liklihood than not, that one has a higher than average gearing level).
The economy has been very tough since 31 December and talk of a "so called" recovery has been exactly that, just talk from where I see things.

You're saying all deliquent and impaired receiveable skeletons are out of the closet and there's no new ones since 31 December 2009 and I firmly believe that is extremly unlikely to be a realistic assessment of the situation ..its as simple as that, which is why you hold the pref shares and I wouldn't buy at even 10 cents. I think if all receiveables assets were marked to market, SCF is bankrupt.

The $114m advance to Southbury is secured over what ? The net value of AH's investment in SCF ? Company lending to itself, where have we seen that before. Like I said some time ago, in 30 years of accounting I've never seen anything as "wildly creative" as SCF's financial statements.

The GFC has brutally exposed AH's love of high leverage and the house of creative accounting is about to fall.

Alan3285

28-07-2010, 11:54 PM

Chalkie points out that the net equity value, according to his calculations, is $114m - of which the 120m, or so, pref share holders have first dibs. Lets say - 95cents per pref share.

Hi Enumerate,

Doesn't that mean that the Ords in SCF are essentially worth little or nothing?

If so, is the $114m advance from SCF to Southbury recoverable?

I guess the answer is 'we don't know' since Southbury is not public, but if that loan is not recoverable, then does it mean that all of the 'buffer' for the SCFHAs is eroded?

If so, it doesn't mean they are worthless - but they are definitely a punt in that a 16c value on the SCFHAs is somewhat like saying that there is a $16m upside in the loan book (including to Southbury). That is a tiny amount in a book of $1b, so there is plenty of upside (to a cap of 100c potentially I guess), and you can't lose more than 16c unless you leverage your way in.

Alan.

Disc: Not an SCFHA holder right now, but have been in the past, and always looking for opportunities.

Enumerate

29-07-2010, 06:16 AM

Chalkie uses a convenient "circular logic" to support his case:

If the equity in SCF is minimal, then the value of SCF shares is minimal, this is the prime Southbury asset, this implies the Southbury loans are bad, which implies SCF has extra impairments which implies SCF equity is minimal.

The following logic is equally valid:

If the equity in SCF is adequate, then there is value in SCF shares, this is the prime Southbury asset, this implies the Southbury loans are covered, which implies SCF has no impairments which implies SCF equity is adequate.

Chalkie could easily have supported the exact opposite conclusion with the available facts! He chose a pessimistic view.

Using this circular logic to "validate" your assumptions is fundamentally dishonest. However Chalkie appears to only need to get this by his Editor. Journalistic standards, in New Zealand, do not demand even a modest level of intellectual integrity.

Danthetitan

29-07-2010, 08:41 AM

minimoke

29-07-2010, 09:13 AM

I work with small businessmen everyday and know full well that its a real battle out there, especially if one has high gearing, (which I think if one is borrowing from SCF its a fair analysis to say there's a greater liklihood than not, that one has a higher than average gearing level).
The economy has been very tough since 31 December and talk of a "so called" recovery has been exactly that, just talk from where I see things.
.
That is pretty much as I see it too. I was in a small town the other day and everyone had the same message - this winter was the worst (in terms of customer dollar spend) they have ever experienced. There are other indicators out there as well suggesting not all is well - indeed things remain very sick. Take for example farm sales. Rural properties are flooding the market but sales are at an all time low. That has to be driving the value down (median values now around $1m down from highs of $1.8m) which means troubles if SCF has loans secured against these properties. Some of the farmers I spoke to had new business ideas or wanted extra plant but they can't get a cent out of the banks.

As far as I can tell from Sandy media coverage SCF isn't doing any new lending- I take it that all the new debenture money is going into repay existing holders as they become due. So this means that the tax payer is supporting old holders as well as new under the Deposit guarantee scheme - and I'm not sure that is what it was designed for. SCF are also telling us loans are being repaid - thats consistent with my visit the other day - the farmers are telling me every spare dollar they get is going back into debt repayment. Now thats not good news for business allied to agriculture and have debts owing to SCF - they aren't getting a cut of the cash to repay their loans.

With deposit rates of 8.25% plus the Deposit Guarantee fees SCF probably has to be a lender of last resort for many of its other loans

So farm loans have to look iffy. Allied loans have to look iffy. Non-rural loans look iffy. I'd say SCF will be looking very closely at their loan book before we see year end accounts.

(and as an aside how is it that in todays Paper Sandy isn't too up to date on SCF's cash position but he knew that yesterday had been phenomenal for new debentures. Interesting also to note that Sandy reckons the Statutory Manager would need to approve any new investor in SCF (as would treasury) which kinda puts SCF into a pseudo Stat Man. SCF clearly can't stand on its own two feet.)

Beagle

29-07-2010, 10:38 AM

That is pretty much as I see it too. I was in a small town the other day and everyone had the same message - this winter was the worst (in terms of customer dollar spend) they have ever experienced. There are other indicators out there as well suggesting not all is well - indeed things remain very sick. Take for example farm sales. Rural properties are flooding the market but sales are at an all time low. That has to be driving the value down (median values now around $1m down from highs of $1.8m) which means troubles if SCF has loans secured against these properties. Some of the farmers I spoke to had new business ideas or wanted extra plant but they can't get a cent out of the banks.

As far as I can tell from Sandy media coverage SCF isn't doing any new lending- I take it that all the new debenture money is going into repay existing holders as they become due. So this means that the tax payer is supporting old holders as well as new under the Deposit guarantee scheme - and I'm not sure that is what it was designed for. SCF are also telling us loans are being repaid - thats consistent with my visit the other day - the farmers are telling me every spare dollar they get is going back into debt repayment. Now thats not good news for business allied to agriculture and have debts owing to SCF - they aren't getting a cut of the cash to repay their loans.

With deposit rates of 8.25% plus the Deposit Guarantee fees SCF probably has to be a lender of last resort for many of its other loans

So farm loans have to look iffy. Allied loans have to look iffy. Non-rural loans look iffy. I'd say SCF will be looking very closely at their loan book before we see year end accounts.

(and as an aside how is it that in todays Paper Sandy isn't too up to date on SCF's cash position but he knew that yesterday had been phenomenal for new debentures. Interesting also to note that Sandy reckons the Statutory Manager would need to approve any new investor in SCF (as would treasury) which kinda puts SCF into a pseudo Stat Man. SCF clearly can't stand on its own two feet.)

Yeah Minimoke, we are in agreement. As you astutuely observe despite the recovery in dairy prices this is NOT flowing through to farm prices.
Asset values all around the country are under serious pressure and from my own experience in recent months on behalf of clients, its extremly hard to get new lending out of the banks or finance companies.

It is quite alarming that Sandy doesn't even know the cash balance. More likely, he doesn't want the market to know how close to the wind SCF are currently sailing. So they had one day with normal investor inflows, for goodness sake please spare us, what a pathetic statement that is, what the heck does one reasonable day's inflows do to recover the situation ? Okay some would argue Rome wasn't built in a day, to which I would reply, well Rome was built on solid foundations not shonky related party transactions for Africa !!

Silverlight

29-07-2010, 02:33 PM

minimoke

29-07-2010, 02:50 PM

Just wondering if anyone has taken into account the Assets of Hubbard Churcher Trust, which is not in SM.

It has listed equity and private equity stakes in the tens of millions, probably hundreds of millions.
Is that teh same as Hubbard Churcher Trust Management Limited - AH ceased his director role in this co late jun 2010 so Stat Man doesn't seem to affect a persons ability to resign directorships. hes a small shareholder - but it would take a while to unravel the various shareholdings of all the companies part owned by HCTML which include Southbury Group. Its been earlier suggested the Govt has got its hands on Auckland's Shed 9 so the paper which shows the Hubbard web of companies can be laid out properly.

Beagle

29-07-2010, 03:54 PM

Its been earlier suggested the Govt has got its hands on Auckland's Shed 9 so the paper which shows the Hubbard web of companies can be laid out properly. Minimoke

Too funny LOL !!

minimoke

30-07-2010, 08:56 AM

Looks like Chalkie might have been right. AH didn't make the Rich List this year and I gather the entry threshold is $50m

winner69

30-07-2010, 07:35 PM

Roger - are these the sort of impaired debts you refer too ..... hope this case is not typical of how easy they gave their money away ... but i fear it is

http://www.stuff.co.nz/manawatu-standard/news/3939779/Peas-to-put-tiny-dent-in-14m-debt

Enumerate

30-07-2010, 08:54 PM

You guys need to keep up - you are laughing at your own rehashed jokes and share rehash links.

It is like outpatient day at the Alzheimer's clinic.

Breastwork

31-07-2010, 08:43 AM

You guys need to keep up - you are laughing at your own rehashed jokes and share rehash links.

It is like outpatient day at the Alzheimer's clinic.

LOL

http://www.stuff.co.nz/business/industries/3977457/Fraud-inquiry-ongoing

winner69

31-07-2010, 09:17 AM

LOL

http://www.stuff.co.nz/business/industries/3977457/Fraud-inquiry-ongoing

Jeez .... thanks for reminding me mate that there actually is a fraud enquiry going on .... have memory problems these days you see

Balance

31-07-2010, 09:55 AM

Jeez .... thanks for reminding me mate that there actually is a fraud enquiry going on .... have memory problems these days you see

What fraud? Even those who hold themselves as championing investors stung by losses in Bridgecorp, Blue Chip etc are rallying behind AH.

How dare the government act to protect Aorangi investors' from sustaining losses?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10662492

Hang on. I think I have just stumbled into Chris "I told Annette King so it's okay" Carter mind!

Beagle

31-07-2010, 12:37 PM

So the SFO have been there six weeks and have decided there are continuing their inestigation.

Is shed 9 big enough ?

Roger - are these the sort of impaired debts you refer too ..... hope this case is not typical of how easy they gave their money away ... but i fear it is
Winner 69

There will be dozens more like that one and hundreds of small loans to over-leveraged companies that are really struggling in this tough economy.
Once the auditors go over all the impaired loans, and the new impairments and deliquencies as at 30 June, I predict another nuke bomb will go off in SCF accounts and just like the last one for the six months ended 31 December it'll be an absolute shocker...that's what I firmly believe and I'll stake my credibility on this blog upon it. SCF don't need a plague of locists, they allready have one in their receiveables book.

Balance

31-07-2010, 01:29 PM

So the SFO have been there six weeks and have decided there are continuing their inestigation.

Is shed 9 big enough ?

There will be dozens more like that one and hundreds of small loans to over-leveraged companies that are really struggling in this tough economy.
Once the auditors go over all the impaired loans, and the new impairments and deliquencies as at 30 June, I predict another nuke bomb will go off in SCF accounts and just like the last one for the six months ended 31 December it'll be an absolute shocker...that's what I firmly believe and I'll stake my credibility on this blog upon it. SCF don't need a plague of locists, they allready have one in their receiveables book.

Reality is that if Sandy cannot find an equity injector by end of August, it will be tough to think how SCF can be allowed to carry on.

The situation is farcical and making our debt market look stupid - government guaranteed debt trading at 15% (SCF020). What is the market saying?

mouse

31-07-2010, 05:19 PM

Reality is that if Sandy cannot find an equity injector by end of August, it will be tough to think how SCF can be allowed to carry on.

The situation is farcical and making our debt market look stupid - government guaranteed debt trading at 15% (SCF020). What is the market saying?
If Govt can keep SCF afloat until their $1million guarantee expires, then their guarantee is only for $250,000 per investor. Seems Govt is doing rather well at avoiding the inevitable. Or at least delaying it to reduce their liability.

Balance

01-08-2010, 12:00 PM

If Govt can keep SCF afloat until their $1million guarantee expires, then their guarantee is only for $250,000 per investor. Seems Govt is doing rather well at avoiding the inevitable. Or at least delaying it to reduce their liability.

Does not quite work out that way unfortunately.

Eg. Assume $10m of non-govt g'ttee debt maturing in August 2010. If SCF falls over, govt does not have to pay out on this debt.

SCF refinances with 40 x $250,000 govt g'ttee debt which matures in 2011. SCF falls over, govt (hence taxpayer) has to pay out on the $10m.

So all the non-govt g'tteed debt is being refinanced by govt g'tteed debt - lucky escapes aplenty for the non retail investors out there.

SCF020 trading at 14.2% today is an excellent indication of what's happening - non govt g'tteed investor getting out and govt g'tteed investor buying in. What a sham. Absolute disgrace.

Beagle

02-08-2010, 11:24 AM

So SCF hang on hoping for a decent equity injection, how long would it take an interested investor to do thorough due dilligence on SCF's books ? my estimate with a team of top forensic accountants, about 10 weeks...

Hamdrew

02-08-2010, 05:27 PM

Beagle

02-08-2010, 07:16 PM

Or 71 days?

Welcome aboard Hamdrew. A very astute initial observation...which for any that might have overlooked it, is exactly the number of days until expiry of the initial GG period.

Beagle

04-08-2010, 10:32 AM

SCF pref shares touch all time low this morning at 9 cents with virtually no depth on the buy side whatsoever. This is down from 17 cents a couple of trading days ago.....

As previously predicted, there will be tears very soon for SCF pref shareholders...Enumerate you'd better get a box of tissues with this weeks groceries.

minimoke

05-08-2010, 08:59 AM

I think what makes this whole affair so interesting is that I have never seen such an empassioned poster extolling the virtues of a company that is so obviously failing.

Enumerate (if you are not an insider and a legitimate investor) next time do your homework, speak to investment professionals, accountants, lawyers, insiders at other finance companies to get the real juice on what is happening because your own judgement is sorely lacking.

if you hadn't worked it out by now, finance companies are ultimately about public sentiment, they rely on cash continually being deposited to continue in business. There is so much bad press surrounding SCF that no third party investor in their right mind would put equity at stake unless it was a Fortress type arrangement (eg Torchlight).

Still businesses dont just roll over and die, there are numerous management which require paycheques to pay their mortgages so they keep the thing going as long as possible putting out as much positive spin as they can. Those who can get out and get new jobs already have, have you not seen the revolving management door at SCF? Those recently employed (eg Sandy maier) have done so on a contract basis so they can step up and demand full payment of the contracted salary when the company falls over.
.
Are we seeing Sandy's exit strategy begin to play out? Yesterday he has taken on a Directors Role at Ngai Tahu Holdings Corporation. I would have thought he would have had his hands more than full at SCF but clearly not. So SCF is either on the mend and Sandy can afford to take his foot off the accelerator as SCF races towards recovery. Or alternatively its about to plunge over the precipice and he needs an extra parachute for a soft landing.

Alex

05-08-2010, 09:54 AM

I think what makes this whole affair so interesting is that I have never seen such an empassioned poster extolling the virtues of a company that is so obviously failing.

Enumerate (if you are not an insider and a legitimate investor) next time do your homework, speak to investment professionals, accountants, lawyers, insiders at other finance companies to get the real juice on what is happening because your own judgement is sorely lacking.

if you hadn't worked it out by now, finance companies are ultimately about public sentiment, they rely on cash continually being deposited to continue in business. There is so much bad press surrounding SCF that no third party investor in their right mind would put equity at stake unless it was a Fortress type arrangement (eg Torchlight).

Still businesses dont just roll over and die, there are numerous management which require paycheques to pay their mortgages so they keep the thing going as long as possible putting out as much positive spin as they can. Those who can get out and get new jobs already have, have you not seen the revolving management door at SCF? Those recently employed (eg Sandy maier) have done so on a contract basis so they can step up and demand full payment of the contracted salary when the company falls over.

*sigh* I just hope this is a lesson for you.

I wouldn’t be so sure and categorical about it, “smoking cubans”. There are too many factors at play there, and it won’t surprise me at all if SCF will be helped to survive and emerge into the post-guarantee period as a new, re-shaped and financially stronger entity.

Toddy

05-08-2010, 12:04 PM

I wouldn’t be so sure and categorical about it, “smoking cubans”. There are too many factors at play there, and it won’t surprise me at all if SCF will be helped to survive and emerge into the post-guarantee period as a new, re-shaped and financially stronger entity.

Well, that's probably what the Tui billboard says driving into Timaru.

GTM 3442

05-08-2010, 12:15 PM

So SCF is either on the mend and Sandy can afford to take his foot off the accelerator as SCF races towards recovery. Or alternatively its about to plunge over the precipice and he needs an extra parachute for a soft landing.

I rather think that he'd be in it for the challenge, rather than the money.

Either he's the White Knight who "saves" SCF, or, "Not even SM could save SCF"

Take your pick.

POSSUM THE CAT

05-08-2010, 01:10 PM

Govt Takeover might be in wind probally cheaper tha paying out under Govt Guarantee

Onthemoney

05-08-2010, 03:02 PM

Maybe 'Ngai Tahu Holdings Corporation' will bail them out

mouse

05-08-2010, 05:18 PM

Govt Takeover might be in wind probally cheaper tha paying out under Govt Guarantee
I agree totally. Trade out of the problem with Govt guarantee. Might skew the field for other finance companies, but if they just trade out, freezing deposits and paying a small say 5% return to depositors then everyone would cheer. Except other finance company investors who have lost their shirt.
A rather funny story of my brother in UK. He was a 'name' with Lloyds. Now this is totally true. He told a West Indian chap, 'I am not going to have a coloured chap working for me.' There was a court case, my brother lost. Lloyds were Furious. WE WILL NOT HAVE RACISTS AS NAMES WITH LLOYDS. So they expelled him! He tells the story with relish.

Enumerate

05-08-2010, 06:26 PM

I am touched by the concern and sympathy expressed by Roger and Smokin' ...

However, I did point out that the SCFHA price would get alot worse before it got better. In fact, what is remarkable, is that it is still bearing up surprisingly well.

I have my initial stake ... I am standing by with some more cash. I will most definitely pickup some more SCFHA before the 31st of August.

I do acknowledge the possibility that it will fail as an investment - but I have done my calculations - the expectation (sum of outcome x probability) is significantly positive.

In a way, I should be grateful to Roger and Smokin' for contributing, significantly, to the renormalisation calculations of the scale invariance. I should mention Zipf's law at this point ... but won't.

Beagle

05-08-2010, 06:53 PM

Your best hope Enumerate, and I agree with some other posters today, is an Air New Zealand sytle equity injection, simply as a loss mitigation stratagy by the Govt. Under that scenario the pref shares could have some value.

As Smokin Cubans has pointed out, its a confidence game, (the whole finance industry) and frankly SCF's reputation is in complete tatters. Lets get real, that half year loss back in April 2010 was an absolute bombshell and completly exposed SCF's appallingly bad loan approval process and woefully inadequte risk assessment proceedures. Those same systemic weaknesses still exist today simply because almost their entire loan book stemmed from the period Lachie was in charge, (very little or any new leanding in recent months).
What a legacy for the "legendary" Lachie to leave.....more of his legacy will be revealed in the full year accounts.

Of course Sandy will try to do a quick two-step and say those further write-down's are in the bad bank ledger and the there's nothing wrong with the core good bank, and the gullable sheepells will be fooled. Creative Accounting 301 - SCF are masters at it and there should be an entire advanced paper on it at university, I predict the academics will be dissecting the greatest financial failure N.Z. has ever known, for years to come.

Enumerate

05-08-2010, 06:59 PM

If I were to tell you of an interesting physical fact:

In lists of numbers from real-life sources, including market data, the leading digit, 1, has almost a one third chance of being the first digit in the list. Larger digits occur as the leading digit with lower and lower probability. The digit, 9, as a first digit occurs with the lowest probability.

Would you believe me?

Enumerate

05-08-2010, 07:10 PM

Roger, you have become increasingly shrill ... with no new real data justifying your position.

This is a classic example of a self organising system ... with sentiment established by "renormalisation effects". I have found to be very very use in fully justifying the risk I an taking with SCFHAs. Thank you, one and all.

Without a doubt, what is happening here is happening in the wider investment community.

No one has responded to the challenge of applying Zipf's law to market dynamics ... early days yet. What about that interesting property of lists of numbers?

GTM 3442

05-08-2010, 08:28 PM

Alan3285

05-08-2010, 10:09 PM

Why would I not ?

But, were I to do so, what would I have learned ?

And where could I apply it ?

Its called Benford's Law (http://en.wikipedia.org/wiki/Benford's_law) and we used to use it a lot in forensic accounting and occasionally in auditing too (don't know if they still do as I am out of that for some time now).

Nothing new - been around for a century or more I think, but its use in financial circles is probably only last 30 years or so (guessing). It is actually to be expected when you stop and think about it for a while. The maths is quite interesting (as all maths is of course), but as I am out of Uni for more years than I care to remember, I wouldn't want to have to derive it from scratch now!

Alan.

winner69

06-08-2010, 08:08 AM

Silverlight

06-08-2010, 08:34 AM

RESPONSE OF SOUTH CANTERBURY FINANCE TO SHARE PRICE ENQUIRY

Share Price Inquiry

We refer to your letter of today's date regarding South Canterbury Finance Limited's compliance with its continuous disclosure obligations under Listing Rule 10.1.1.

In view of the recent significant decrease in the market price of South Canterbury Finance Limited's listed perpetual preference shares, NZX has asked whether South Canterbury Finance Limited continues to comply with Listing Rule 10.1.1.

South Canterbury Finance Limited confirms that, in its view, it continues to comply with Listing Rule 10.1.1.

South Canterbury Finance Limited is aware that a financial adviser has written to clients who hold perpetual preference shares expressing the view that the recapitalisation process currently being pursued by the company is unlikely to be successful and setting out the potential implications for perpetual preference shareholders if that is the case. South Canterbury Finance Limited confirms that positive discussions are continuing with parties who remain interested in participating in the proposed recapitalisation of the Company.

Yours Faithfully

Sandy Maier

Balance

06-08-2010, 10:01 AM

Alan3285

06-08-2010, 10:06 AM

Positive = they are still talking to us.

Deal? Govt takes the bad and impaired loans. New investor takes good loans and put in equity.

If I was Sandy Maier and / or the Treasury - I would be inclined to take that deal. It seems to make sense all round.

So, should we buy those SCFHAs while they are still cheap?

Alan.

minimoke

06-08-2010, 11:14 AM

Deal? Govt takes the bad and impaired loans.
Why would the Govt take the bad and/to impaired loans? There is no recent precedent of that and it would perhaps be a dangerous precedent to set. With AIR the govt took the lot - which meant they had some decent assets to help manage the dodgy stuff.

So the Govt could accept its up for some cash if the Deposit Guarantee is called in. There is already provisioning for that - but would it be enough for the Bad Books?

A Stat Man with a receivership might be a better option if there is going to be Govt intervention. That way the depositors will get some money back via the good books and the govt will pay the difference.

Imagine the uproar from all the Hanover / Bridgecorp grannies if SCF people get their cash and they don't - Winston Peters will love it and here comes NZ First. A consequence National won't find too palatable.

Beagle

06-08-2010, 04:14 PM

How long have SCF been engaged in "meaningful discussions" with 14, oops sorry 5, oops sorry a couple, oops sorry 5, prospective equity partners that are looking "promising"? Five months ? Waivers by trustees extended because Torchlight reinvesting funds into SCF that SCF lent to Torchlight - oops sorry, that's not allowed. Oh well we'll extend the waiver anyway because good old AH has definitely got an equity partner arranged before June 30. OOps that's didn't happen but hey it'll be okay because SCF are splitting up the company into the Good, the Bad and the Ugly and they can sell the Good to an equity investor. Oops that didn't happen but that's okay because we're actually trying to get investors for the "whole" company - don't worry so much about the Good, Bad, Ugly thing. Oops it's the 6th of August already - I'll know - we'll spin a bit of a yarn about how close we are to getting an equity partner that'll buy us more time maybe. Maybe Aorangi, or Hubbard Managed Fund could lend Torchlight some more money, do it interest free even, and then Torchlight could invest in SCF and we'll meet the Trust reqirements. Oops AH is in statutory management - can't do that anymore. Must be some way? The Chinese? Could maybe swing a deal in combo with Crafar farms - lots of potential money there. That'll sort out the $180m. Oops it's nearly Oct 12th - we just need another $350m ........

Classic post from the interest.co.nz blog today. Hope that's not to shrill for you Enumerate.

Balance

06-08-2010, 04:56 PM

Classic post from the interest.co.nz blog today. Hope that's not to shirll for you Enumerate.

LOL - When the train hits them is when the AH cultists scream "we did not see it coming! "

winner69

06-08-2010, 05:12 PM

Shasta will be pleased to know that Zipf's law is a good rationale to say why Chealsea and Arsenel will continue to win the EPL most yaers into the future I haven't quite sussed how it applies to SCF yet ... maybe a bit slow on a Friday .... so I will stick to my entropy hypothesis in the meantime

Beagle

06-08-2010, 05:31 PM

LOL - When the train hits them is when the AH cultists scream "we did not see it coming! "

Quote for the day, "You can lead a horse to water, but you can't make it drink" If its determined to take a beating from dehydration, i.e. losses from the inevitable, *shrug sholders*, so be it.

Balance

06-08-2010, 07:57 PM

Have no fear, AH Cultists, EUFA is here.

http://www.stuff.co.nz/business/personal-finance/3999160/Hubbard-investors-want-heads-to-roll

Enumerate

06-08-2010, 09:01 PM

Emunerate - I appreciate that Zipf's Law and market activity are linked and there are many intriguing papers on the subject .... but with Hubbard/SCF I propose that other natural phenomena such as entropy and its relationship with business's is a greater power in this case

Entropy and its relationship with business can mean a number of things. Partition functions or the 2nd Law are two that spring to mind. The common factor, with both of these, is the notion of "equilibrium". The situation we are in with SCF is not anywhere near equilibrium - we are dealing with an approach to a critical point. In my experience, the greatest opportunity for investment success occurs at critical points.

If I explain myself, simply, so that even Roger can understand ...

The market for things like SCFHAs is a self organising system. News flow and perception often swamps accounting fact in terms of impact on the price trajectory.

SCF is a singular situation, in that there is very little in real accounting fact to rely upon but there is a massive polarization in terms of sentiment.

I am watching two things. Forum sentiment (various places) and the trading pattern of the SCFHA.

Broadly speaking ... the degree of polarization is increasing with the characteristics of the two groups being (with gross simplification) that retail "holders" are PRO and "advisor" non-holders are AGAINST.

We have had recent "waves of fear" based on the news flow. As we move closer to perceived deadlines fear will drive price action. This will create opportunity.

SCFHA holders have to contemplate either a restoration situation for SCF or a recovery situation as a subordinated debtor. The relative probabilities and the likely outcome reflect an expectation in value for the SCFHA. Buying below this price is an investment opportunity.

The real question is ... what is this "expected value". If you listen to Roger and Balance ... it is zero. My view is that 15cents per unit, in its present situation, is that expectation value. Should events crytalise, in a negative way, my view is that 10cents would be the expectation. I won't justify this any further ... however, Zipf may have some insights to offer the studious.

The key observation, for me, is that the pro-SCF constituency has not weakened or faltered. The anti- side has grown increasingly shrill and emotional (they sort of started off there, for some reason) - they have failed to detail anything like a demonstration of the inevitability of failure for SCF. Hence, this is a very rare situation ... the "knowledge" encoded in peoples attitudes is not clear, one way or another. (To see the difference, ask yourself who was defending Eric Watson in the late stages of the Hanover debacle).

This is, really, another Smiths City situation. Students of history will know what happened there.

"The true logic of this world is the calculus of probabilities". — James Clerk Maxwell

winner69

06-08-2010, 09:12 PM

So we can keep on the same wavelength is your 15 cents expected value bssed on 15% chance of getting your $1 back and 85% chance of losing the $1?

Seems easier to understand why London clubs will win most future English Premier Leagues because London will always be twice as big as the next biggest English city while the smaller cities and towns will just get relatively smaller and smaller

Enumerate

06-08-2010, 09:23 PM

So we can keep on the same wavelength is your 15 cents expected value bssed on 15% chance of getting your $1 back and 85% chance of losing the $1?

Well, no ... because I ascribe a value of 10cents to the situation in which the Pref Trust Deed is trigger.

However, as a first order estimate ... your proposition offers the challenge ... what is the chance of failure for SCF - if you do not think it is a certainty, what probability do you think it is?

Seems easier to understand why London clubs will win most future English Premier Leagues because London will always be twice as big as the next biggest English city while the smaller cities and towns will just get relatively smaller and smaller

I will say that Zipf has been applied to the probability of firm failure. Look up Didier Sornette and a book called "Theory of Zipf's Law and Beyond". Sornette has a number of lectures and books on financial markets, on the Internet.

Enumerate

06-08-2010, 09:38 PM

Found this ...

If someone points out to you that your pet theory of the universe is in disagreement with Maxwell's equations—then so much the worse for Maxwell's equations. If it is found to be contradicted by observation—well these experimentalists do bungle things sometimes. But if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation.

Oh dear ... lets hope we are very far from equilibrium on this ...

Alan3285

06-08-2010, 11:42 PM

Found this ...

Oh dear ... lets hope we are very far from equilibrium on this ...

{Grin}

Alan.

Beagle

07-08-2010, 09:12 AM

Balance

07-08-2010, 10:07 AM

Enumerate, all wonderful theories, I am sure, but theories and historic ones at that.

An alcoholic doesn't think he has a drinking problem, a heavy smoker is I denial it
will affect his health and an AH Cultist thinks everything will be fine and there are
no more problems in SCF's loan book.

Fact is investors simply won't back this company once the Government guarantee
expires and as the pref. shares are perpetual in nature, there simply isn't any other end
game other than them being worthless, unless your counting on an Air N.Z. style equity
injection.

Well summarized, Roger.

The June 30th set of accounts coming out (with the auditors now under the spotlight like never before) will have more provisionings - of that there is no doubt.

You don't have to do more than look at the property listings in the Queenstown- Lakes districts to know that valuations have continued their downward spiral. SCF has lent big into that area.

Enumerate

07-08-2010, 03:24 PM

... all wonderful theories, I am sure, but theories and historic ones at that.

First of all ... if your understanding is not guided by a theory, you have no understanding at all. Soros has Reflexivity, Buffet has his theory of Value investing, ....

The application of condensed matter physics to self organising financial systems is hardly historical. You really should catch up on your Didier Sornette ...

Beagle

07-08-2010, 05:20 PM

Well summarized, Roger.

The June 30th set of accounts coming out (with the auditors now under the spotlight like never before) will have more provisionings - of that there is no doubt.

You don't have to do more than look at the property listings in the Queenstown- Lakes districts to know that valuations have continued their downward spiral. SCF has lent big into that area.

Cheers Balance. Quite right and its not just limited to that area by any means.

The CEO of one of the major real estate franchise's is a client of mine and also one of N.Z.'s top auctioneer's and i've had quite a number of good chats with him in recent months. I have it straight from the horses mouth with no B.S. that Real estate prices for all sorts of discretionary housing, with special emphasis on holiday homes and expensive property generally, all around the country no matter where you go its the same, prices are under very serious pressure as vendors look to sell non-essential housing to sure-up their business's and balance sheets generally.

Of course none of this, *sigh*, could possibly impact further deliquent loan provisioning in SCF's books, according to the devoted AH fans.

Another good point you've raised is the intense pressure on Auditors, personally I've given up auditing, the risks are simply too great and besides I hate the work and don't need it. That said SCF can expect an even more thorough audit for its full year books.

winner69

07-08-2010, 07:17 PM

That guy Hilary reckons Dairy Holdings may not be worth anything to SCF

http://www.lostsoulblog.com/2010/08/dairy-holdings-whats-it-worth.html

Marilyn Munroe

08-08-2010, 02:26 PM

Here is a link to the Timaru Herald report of the recent Alan Hubbard supporters group public meeting in Timaru.

http://www.stuff.co.nz/timaru-herald/news/4000663/Hubbard-investors-demand-answers

Boop boop de do

Marilyn

Beagle

08-08-2010, 05:17 PM

That guy Hilary reckons Dairy Holdings may not be worth anything to SCF

http://www.lostsoulblog.com/2010/08/dairy-holdings-whats-it-worth.html

That wouldn't surprise me. David Hillary stikes me as a bright young chap.

The average farm value according to REINZ stat's has fallen from $1.8 million to $1.0 in the last couple of years and as that's a 40% average fall and Dairy Holdings is 60% geared, based on the average farm price slide there's no equity left.

Latest payout forecasts cast a shadow over future trends in farm pricing too, and that's before we even go into the massive overhang of rural land currently on the market.

But I'm sure the "infinite intelligence" of running such high gearing level's in dairy farming is all "kosher", there's no problems regarding marking this asset to market value, YEAH RIGHT !!

westerly

08-08-2010, 07:40 PM

That wouldn't surprise me. David Hillary stikes me as a bright young chap.

The average farm value according to REINZ stat's has fallen from $1.8 million to $1.0 in the last couple of years and as that's a 40% average fall and Dairy Holdings is 60% geared, based on the average farm price slide there's no equity left.

Latest payout forecasts cast a shadow over future trends in farm pricing too, and that's before we even go into the massive overhang of rural land currently on the market.

But I'm sure the "infinite intelligence" of running such high gearing level's in dairy farming is all "kosher", there's no problems regarding marking this asset to market value, YEAH RIGHT !!

The average price for the 6 dairy farms sold in Canterbury during June was $3,389,167 at $32033 a hectare. Average price for milk solids per kg declined to $40 in June. The average price of all farms sold in Canterbuy was$1,250,000 a decline of $10,000 over 2009. But don,t let the facts get in the way of a good story. The value of Dairy Holdings is unknown until it is put up for sale and a willing buyer is found.
Not by the wild and inaccurate speculations of Roger and his fellow crusaders

Westerly

minimoke

09-08-2010, 09:36 AM

The average price for the 6 dairy farms sold in Canterbury during June was $3,389,167 at $32033 a hectare. Average price for milk solids per kg declined to $40 in June. The average price of all farms sold in Canterbuy was$1,250,000 a decline of $10,000 over 2009. But don,t let the facts get in the way of a good story. The value of Dairy Holdings is unknown until it is put up for sale and a willing buyer is found.
Not by the wild and inaccurate speculations of Roger and his fellow crusaders

Westerly
Westerly - I think yoru stats aren't quite right so feel to correct me if I'm wrong. Teh 6 dairy farms you mention were the 6 dairy farms sold in NZ in june, not sold in Canterbury. The average price per hectare was $32,033 but this was down from $39,653 in May. Milk solids were $45 in May down to $40 in June.

In June there were 81 farms sold. In 2009 , in June there were 80, in 2008 there were 216 (how leveraged do your think those 216 buyers are?). In the three months to June there were 45 farms sold in Canterbury down from 132 in 2008.

But its not just Canterbury. What about Otago. In the 3 months to June they fell from $1,240,500 last year to $565,000 this year. And Southland down from $1,175,000 to $1,100,000 and the West Coast dropped t0 $455,000 from $2,900,000.

I think it is very safe to say that we do not need Dairy Holdings to be sold to find out its real value (though that prospect may not be too far away) and we can be absolutely certain the book value has dropped. I don't know how the book value will be arrived at but we can take it average and median farm values based on sales are dropping. We can also take it that banks are not lending and finance Co's like SCF do not have the cash to make loans to make purchases quite so possible. So you have extra supply, low demand, no money to fund that demand, rising interest rates, and a disconnect between Grant Samuels and Fonterras 2010/11 solid prices - I'd say the book value has to be looking a bit glum.

Jaa

09-08-2010, 11:08 AM

Surprised no one has mentioned the Sunday Star Times article on Terry Serepisos. SCF have the second mortgage on many of his buildings though Marac has a couple and the real surprise was that Hanover might have made an ok loan!

My opinion is that the Wellington commercial property sector is going to be under heavy pressure for the next few years. IRD will be vacating 11 buildings around town by themselves for their new headquarters soon, Asteron are leaving a whole building on the Terrace for 1 floor in the same building. The new Telecom building in Willis Street will see several more older buildings vacated. BNZ's previous tower in Willis Street they left this year for the waterfront is still empty and the for lease sign is up for floors 4-15 in the ANZ Tower opposite me. These are all very large and well paying tenants that will be difficult to replace for the building owners. Needless to say not many government departments are expanding at the moment with most slowly reducing headcount.

Thus lots of reasonable office space available in Wellington with plenty more coming on stream so expect more impairments to come from this sector.

Inside the $230m Serepisos real estate empire
http://www.stuff.co.nz/business/4002149/Inside-the-230m-Serepisos-real-estate-empire

Oh and if you need further evidence, here's a special I saw on the street outside a prominent cafe on the Terrace (where coffee alone used to be $4.50) this morning....

"Bacon, Eggs & Coffee for $10"

The Horror!

minimoke

09-08-2010, 02:14 PM

Surprised no one has mentioned the Sunday Star Times article on Terry Serepisos. SCF have the second mortgage on many of his buildings though Marac has a couple and the real surprise was that Hanover might have made an ok loan!
Jaa, we can see Bank of Scotland has 1st mortgages over some of Serepisos properties - and sitting behind them is SCF. BOS is also financing a large chunk of Pegasus Town so I wonder if SCF has any second mortgage exposure here?

Danthetitan

09-08-2010, 03:37 PM

Jaa, we can see Bank of Scotland has 1st mortgages over some of Serepisos properties - and sitting behind them is SCF. BOS is also financing a large chunk of Pegasus Town so I wonder if SCF has any second mortgage exposure here?

NEWSFLASH!!!! SCF HAS A LARGE NUMBER OF PROPERTY LOANS SECURED BY SECOND MORTGAGES!
but we didn't already know that, did we?

Beagle

09-08-2010, 05:04 PM

[QUOTE=westerly;314438]The average price for the 6 dairy farms sold in Canterbury during June was $3,389,167 at $32033 a hectare. Average price for milk solids per kg declined to $40 in June. The average price of all farms sold in Canterbuy was$1,250,000 a decline of $10,000 over 2009. But don,t let the facts get in the way of a good story. The value of Dairy Holdings is unknown until it is put up for sale and a willing buyer is found.
Not by the wild and inaccurate speculations of Roger and his fellow crusaders
I'm quoting nationwide REINZ figures buddy, so get with the programme if you want any cred around here you'll have to do better than give small pockets of theoretical evidence and say that's the widespread mean average.

Straight off Chris Lee's weekly mailer this afternoon, he reckons it will take $950 million dollars to put SCF's balance sheet completly right and really make it kosher !!

Enumerate

09-08-2010, 08:07 PM

westerly

09-08-2010, 08:29 PM

[QUOTE=minimoke;314475]Westerly - I think yoru stats aren't quite right so feel to correct me if I'm wrong. Teh 6 dairy farms you mention were the 6 dairy farms sold in NZ in june, not sold in Canterbury. The average price per hectare was $32,033 but this was down from $39,653 in May. Milk solids were $45 in May down to $40 in June.

Minimoke

Apologies.The 6 farms were in Southland not Canterbury. In the May - June quarter 31 dairy farms sold nationally at an average price of $3,150,000. None were sold in Canterbury which could mean , none for sale, price too high or no finance available. As dairy farms are still selling in other parts of NZ the problems with water may have something to do with it. As far as SCF goes no news from the board could mean they are still confident or ?
Westerly

Danthetitan

09-08-2010, 08:49 PM

I see the thread has sunk to new lows ... Roger is quoting Michael Warrington as Chris Lee and using fancy technical accounting terms like "to put SCF's balance sheet completly right and really make it kosher".

Here I thought that "kosher" was something Jewish people did to their food. Now I find out it is in IFRS.

This $950m is a worst case guess involving a near total refinancing and refloating of the business. If you read Warrington - you are not left feeling much deep respect for chrislee.co.nz. This "seat of the pants" fear mongering might work for small town financial advsers but it makes their backing of Strategic Finance look like some kind of cunning plan.

Sharetrader.co.nz did have a better reputation for analysis until the SCF blogosphere circus began - complete with resident clowns and the occasional high wire act.

Yeah, nothing to worry about, they only need $100m to offset new losses according to that source ... those SCFHAs will be back near a dollar any time soon when an australian instititional investor with slanty eyes shows up with a suitcase of money

Beagle

09-08-2010, 08:56 PM

I see the thread has sunk to new lows ... Roger is quoting Michael Warrington as Chris Lee and using fancy technical accounting terms like "to put SCF's balance sheet completly right and really make it kosher".

Here I thought that "kosher" was something Jewish people did to their food. Now I find out it is in IFRS.

This $950m is a worst case guess involving a near total refinancing and refloating of the business. If you read Warrington - you are not left feeling much deep respect for chrislee.co.nz. This "seat of the pants" fear mongering might work for small town financial advsers but it makes their backing of Strategic Finance look like some kind of cunning plan.

Sharetrader.co.nz did have a better reputation for analysis until the SCF blogosphere circus began - complete with resident clowns and the occasional high wire act.

I guess that makes you the resident clown as you've been here far longer than I.
You're one of only an increasingly small minority that are still in denial about the extremly grave situation SCF face.
Of course my reference to Kosher was a tongue in cheek remark to how AH sees Aorangi securities and its operational systems, but you knew that.

Just keep buying those preference shares mate...I'm sure AH will see you right.

Enumerate

09-08-2010, 08:56 PM

As far as SCF goes no news from the board could mean they are still confident or ?

There seems to be an orchestrated litany of lies being put about concerning SCF. Every possible negative nuance is trotted out as the next disaster.

It seems some kind of weird new spectator sport to lather up with schadenfreude and to cast aspersions on anything SCF does. Of course the ritual crowing about how you exited SCF months ago - is mandatory. It just makes it all the more inexplicable to understand exactly what game these people are playing.

Perhaps these are the dead and dried out husks of former financial advisers who fell off the SCF gravy train. Embittered by SCF contacting clients, directly, to rollover funds. Facing the oblivion of having to pass financial adviser examinations to continue plying the "craft". They prefer to blog, endlessly and monotonously, on subjects they never understood, but really should have, and are now faced with hard graft to get back to the position they had before, but didn't deserve.

All very sad and strange - like something out of Franz Kafka - Metamorphosis.

winner69

09-08-2010, 09:06 PM

Here I thought that "kosher" was something Jewish people did to their food. Now I find out it is in IFRS.

Kosher took on a new meaning a while ago .... remember Alan telling Radio NZ he "never borrowed" and it was "always kosher"

Balance

09-08-2010, 09:16 PM

Kosher took on a new meaning a while ago .... remember Alan telling Radio NZ he "never borrowed" and it was "always kosher"

Oops - a certain AH cultist shot himself in the mouth! Fancy rubbishing the words of AH himself!

SCFHA being generously supplied at 11.5c. Tells its own tale, doesn't it?

Beagle

09-08-2010, 09:32 PM

Oops - a certain AH cultist shot himself in the mouth! Fancy rubbishing the words of AH himself!

SCFHA being generously supplied at 11.5c. Tells its own tale, doesn't it?

Yes !! I think Michael Warrington made a really interesting point in his report today regarding the call option SCF010 and 020 holders have if there's an effective change of control at SCF. Basically holders of these notes can ask for their redemption if effective control passes, i.e. Southbury no longer holds a majority shareholding. Its impossible to imagine that SCF ord's have much value at all and only the most extreme cultists fail to realise that SCF needs at the absolute minimum $200 million to at least keep going, so a change of controlling shareholding looks almost certain,. that's if anyone is brave enough, (should that read stupid enough) to step up to the plate, which in my opinion is exceptionally unlikely. Of couse the loss carried forward rules mean that any change of majority shareholding wipes out all those tax losses, so that kisses goodbye to about $100 million of so called asset on the balance sheet. Still that's no real loss as in my opinion, this figure is allready highly questionable.

Breastwork

09-08-2010, 09:48 PM

Enumerate, I think you'll find it was AH himself that introduced the term kosher to this thread.

BTW what happened to your disclaimer?
Realization of NPD per chance?

(jeez must be a slow typist - already at ya ER)

Breastwork

09-08-2010, 09:53 PM

Roger, what are the chances that Torchlight is in talks with the government about paying them to take it off their hands?

Breastwork

09-08-2010, 10:19 PM

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10664377

"Exposing Unacceptable Financial Activities (EUFA), a body which campaigns on behalf of investors burned in finance company collapses."

What are the true values of this crowd?
What if his entities are found to be just like the many others?

Fools rush in......

Enumerate

10-08-2010, 07:24 AM

Balance

10-08-2010, 08:32 AM

Yes !! I think Michael Warrington made a really interesting point in his report today regarding the call option SCF010 and 020 holders have if there's an effective change of control at SCF. Basically holders of these notes can ask for their redemption if effective control passes, i.e. Southbury no longer holds a majority shareholding. Its impossible to imagine that SCF ord's have much value at all and only the most extreme cultists fail to realise that SCF needs at the absolute minimum $200 million to at least keep going, so a change of controlling shareholding looks almost certain,. that's if anyone is brave enough, (should that read stupid enough) to step up to the plate, which in my opinion is exceptionally unlikely. Of couse the loss carried forward rules mean that any change of majority shareholding wipes out all those tax losses, so that kisses goodbye to about $100 million of so called asset on the balance sheet. Still that's no real loss as in my opinion, this figure is allready highly questionable.

"SCF wanted to sell the business as a whole rather than carve it up" - pretty sums up what SCF is desperately trying to do versus the attitude of the "investors' looking over SCF.

http://www.stuff.co.nz/business/industries/4006813/Deadline-looms-for-South-Canterbury-Finance

Deadline looms for South Canterbury Finance
By MARTA STEEMAN - BusinessDay.co.nz Last updated 05:00 10/08/2010

Cash-strapped South Canterbury Finance will announce in three weeks whether it has forged a deal with investors to inject new capital.

August 31 is the date at which a waiver from breaches of its trust deed by the trustee, Trustee Executors, expires.

The trustee, Yogesh Mody, of Trustee Executors, said yesterday that SCF needed cash to bring it back into compliance with its trust deed.

While SCF had not defaulted on repayments to its debenture holders, it was in breach of its trust deed and had been granted a waiver by the trustee until August 31.

He said the trustee could call a default without a payment default to debenture holders "because currently they [SCF] are in breach of their trust deed in any event".

"They have insufficient capital for the types of business they are operating in, so we are absolutely entitled to take enforcement action and we have chosen not to. We did that back in February fundamentally as a quid pro quo for receipt of the extra assets [Helicopters and Scales Corporation]."

The trustee and investors were now awaiting the recapitalisation plan.

"It would be fair to say they [SCF] are well aware of the time frames, and they are working feverishly towards them."

SCF will also be releasing its financial result for the year to June 2010 on August 31.

SCF chief executive Sandy Maier said yesterday that progress was being made towards recapitalisation.

"We still have a number of parties in negotiations. We haven't lost anybody. We are closing in on time and detail. We are still headed for an announcement on August 31," he said.

SCF was geared up to meet that time frame.

"Part of that depends on the investors themselves but everyone understands the timetable and deadlines," Maier said.

The number of investors interested had increased but he was unwilling to provide the number.

"It's getting to be a pretty solid list and hopefully one of them will come up with something that is doable."

SCF wanted to sell the business as a whole rather than carve it up. One of the factors was to preserve the tax losses that could be used later if there was a certain continuity of ownership but he said that was not the primary driver.

If SCF sells more than $200m of assets, that requires the approval of the Torchlight Security Trustee which has lent SCF $100m. Maier said that was just normal commercial control of an investor. If approval was difficult to obtain then Torchlight could be repaid.

Beagle

10-08-2010, 08:41 AM

Roger, what are the chances that Torchlight is in talks with the government about paying them to take it off their hands?

May I presume you mean, the Government paying Torchlight, so they have the extra capital to invest ?

minimoke

10-08-2010, 09:14 AM

If ... In short, the Warrington scenario and prognosis for refinancing is simply the idle musings of a small town financial adviser.
Can't say I'm a follower of Chris Lee so his musings (and those of his staff) are a bit beyond me. However it strikes me Enumerate that you don't rate small town financial advisors. Just so we are clear how do you rate Timaru - I'd always thought it was a kinda small town. Sure it had its own financial advisors but the advantages were plain for investors when they could also rely on that small towns auditors as well as the local friendly accountant. I guess if we are to rate advisors on the size of their metropolis then I'd have to be checking out Forstyh Barr here in Christchurch - except I ditched them many years ago.

winner69

10-08-2010, 09:52 AM

Hawera is a pretty small town I think ... whose HQ is there

Beagle

10-08-2010, 11:05 AM

Can't say I'm a follower of Chris Lee so his musings (and those of his staff) are a bit beyond me. However it strikes me Enumerate that you don't rate small town financial advisors. Just so we are clear how do you rate Timaru - I'd always thought it was a kinda small town. Sure it had its own financial advisors but the advantages were plain for investors when they could also rely on that small towns auditors as well as the local friendly accountant. I guess if we are to rate advisors on the size of their metropolis then I'd have to be checking out Forstyh Barr here in Christchurch - except I ditched them many years ago.

Well said !! Timaru residents can always rely on Uncle Alan to advise them and invest where he says its kosher on first registered mortgage, (NOT).

Beagle

10-08-2010, 11:07 AM

Hawera is a pretty small town I think ... whose HQ is there

My brain hurts from reading some much corporate speel B.S. from SCF and their fellow cult members so please save me the anguish and spill the beans.

winner69

10-08-2010, 11:50 AM

My brain hurts from reading some much corporate speel B.S. from SCF and their fellow cult members so please save me the anguish and spill the beans.

Just a recurring theme mate ... all the sad action these days seem based around small town disasters ... Allied HQ in Hawera even though Alloway would say as he based in Wellington Corporate HQ is Lambton Quay Wellington

Maybe he should move into offices at the Allied Finance Basin Reserve ... what a waste of money those naming rights are

Toddy

10-08-2010, 12:32 PM

Just a recurring theme mate ... all the sad action these days seem based around small town disasters ... Allied HQ in Hawera even though Alloway would say as he based in Wellington Corporate HQ is Lambton Quay Wellington

Maybe he should move into offices at the Allied Finance Basin Reserve ... what a waste of money those naming rights are

Stupid me, I thought that the reference of 'small town' related to New Zealand. But when I think real hard about it, we do have a new Super City which is (was) full of financial advisors. Even if they were not so friendly.

minimoke

10-08-2010, 12:55 PM

You're joking right ?

This time they are being properly audited so judging by the the half year release, early April, we could expect to see audited full year financials around early October....if they last that long, opps, did I really say that...

LOL I think they're too busy doing yet another downwards revlauation on Hand-over assets, should that read liabilities ?
According to trustee, Yogesh Mody, of Trustee Executors SCF will be be releasing its financial result for the year to June 2010 on August 31. I am making the assumption that he means 2010.

winner69

10-08-2010, 02:18 PM

Alan writes to his investors ..... there is a trust fund available if you need some dosh ... kosher

Plenty of mentions of Jean but nothing about the cat .... hope the cat is alright in the wet and cold conditions imaru seems to be having

http://www.stuff.co.nz/business/personal-finance

minimoke

10-08-2010, 02:59 PM

Alan writes to his investors ..... there is a trust fund available if you need some dosh ... kosher

How is it that AH is lauded when he offers to spend $29k in trust money (which isn't his money either) to support his investors and throws his own money in (assuming there is any left) should Aorangi go wrong. Yet Hotchin and Watson both offered $5m each to back up Hanover investors if Hanover failed to make capital repayments to investors and they get castigated. Oh I know. AH supporters choose to stay with Call Me Kosher AH; but Hanover investors choose the greener grass in the Allied pasture. Its so much easier to blame another for ones own decisions and losses

Beagle

10-08-2010, 04:48 PM

How is it that AH is lauded when he offers to spend $29k in trust money (which isn't his money either) to support his investors and throws his own money in (assuming there is any left) should Aorangi go wrong. Yet Hotchin and Watson both offered $5m each to back up Hanover investors if Hanover failed to make capital repayments to investors and they get castigated. Oh I know. AH supporters choose to stay with Call Me Kosher AH; but Hanover investors choose the greener grass in the Allied pasture. Its so much easier to blame another for ones own decisions and losses

By assigning blame elsewhere a common trait of human nature, one doesn't have to fact the reality of ones own mistakes. Living in denial, I can think of one blogger on here that's got that one down to a fine art !!

Yeah I know what SCF and the Trustee said, talk is cheap, most especially so for SCF, lets see when they really deliver their audited accounts and how much of a "shocker" they are.

minimoke

10-08-2010, 05:26 PM

Yeah I know what SCF and the Trustee said, talk is cheap, most especially so for SCF, lets see when they really deliver their audited accounts and how much of a "shocker" they are.
Perhaps we are being a little harsh. Lets face it, we have had nothing but really quite positive news from SCF of late.
- they clearly have a number of keen parties who are really interested in providing a little extra equity with an announcement promised by 31 August
- the accounts are much tidier so YE result will be released by 31 August and clearly won't present any problems to the much more professional auditors
- Directors (as a result of the Feltex decision) can just take the Auditors at their word and the auditors will have an appropriate disclaimer so there won't be any need for any convoluted audit process.
- the Trustees are quite happy to let the status quo continue with respect to the covenant breach - so no extra bad news there.
- Sandy has got some extra free time to take up a new Director role with Ngai Tahu - so the pressure has to be coming off.
- several highly experienced, talented and qualified senior executives have no concerns for their career prospects and have taken up residence in SCF
- It was announced SCf is at break even for the March quarter
- Their credit rating was reaffirmed but it was only the actions of a non-related party (aorangi) which caused a further downgrade)
- the Crown approved the Deposit Guarantee extension and they are hardly likely to put tax payer money at risk
- debenture holders have been reinvesting quite happily
- The wealthy and grateful supporters of SCF have managed to rustle up the very tidy sum of $29,000 in no time whatsoever to support their brother investors.
- the half year impairments have been dealt with and at a time when the upturn in milk solid prices was looking good
- there has been no negative profit/loss report required to keep the market informed. In the absence of bad news we can assume its only business as usual and thus good news.
- AH will be found to have done nothing of consequence in the court of public opinion and will bring the Saviour to the table in time.

Really its all looking quite rosy!

Beagle

10-08-2010, 05:34 PM

LOL Yeah Right !! May I presume all the above is tongue in cheek ?

Enumerate

10-08-2010, 06:54 PM

You can take a donkey to water, but you cannot make him drink.

westerly

10-08-2010, 07:27 PM

There seems to be an orchestrated litany of lies being put about concerning SCF. Every possible negative nuance is trotted out as the next disaster.

All very sad and strange - like something out of Franz Kafka - Metamorphosis.

Enumerate in earlier posts was not a supporter of SCF but following some announcements he saw some value with risk in scfha's. He also was not approving of AH 's and Aorangi's statutory management.
Enter the serial posters with a mission to rubbish anyone or anything remotely supportive of SCF.
The fact that the SFO hedged their bets by saying their investigations do not necessarily mean a prosecution will result and they had not even spoken to AH to hear what he had to say was ignored.
Given that all media coverage is basically repetition with very little new information forthcoming and generally unfavourable to SCF it is not surprising anyone with an interest in buying in is delaying decision making to drive as hard a bargain as possible. If SCF goes to the wall they will have certainly
been pushed there.

westerly

minimoke

10-08-2010, 07:45 PM

If SCF goes to the wall they will have certainly been pushed there.

westerly
Westerly - thats just a nonsense. Wherever SCF end up they will have got their under their own steam. Its worth pointing out though that it is people like me who are helping SCF in a positive sense. I'm after-all out working and paying taxes which is enabling existing debenture holders to be repaid their investments. They get to sleep easy at night thanks to my labour. New investors also get to sleep easily till late next year as I'll continue to work to create the taxes to fund the deposit guarantee scheme. I get to sleep well at night knowing my little bit is being done - so its probably not so much a metamorhosis but a symbiotic relationship.

Enumerate

10-08-2010, 07:58 PM

Enumerate in earlier posts was not a supporter of SCF but following some announcements he saw some value with risk in scfha's. He also was not approving of AH 's and Aorangi's statutory management.

This is absolutely true. I felt that, at the time, SCF was in denial of the severity of it's problems and that the Trust Deed of the SCFHA was particularly weak in terms of rights of redress in the event the dividend payments were suspended.

My view, now, is that Sandy Maier has galvanised SCF management attention on the core issues. I acknowledge the still significant risks - but I do not assess them to be insurmountable.

SCF is the largest of the NZ finance companies. It's customers and it's community stakeholders see value in it and want it to stand. The combination of size, history, value - all add up to a strong will to see SCF survive. Where there is a will ... there is a way.

The case against SCF, on this thread, is basically unintelligent. Barracking slogans does not defeat a reasoned argument.

It is also not intelligent investment to oversubscribe to risk and fear at the expense of a measured understand of risks.

For those holding SCFHA ... and the trading volumes are completely insignificant compared with the held volumes ... I am very keen to put forward a reasoned cased that selling at 15 cents might fail to acknowledge the likely outcome dictated by cold logic. These are fearful times ... but you fail if you make fear your master.

winner69

10-08-2010, 08:01 PM

minimoke - I get the feeling that westerly doesn't really appreciate that SCF prob been going to the wall (won't say insolvent cause that is only conjecture and speculation) for a year or so

I doubt that recent actions by the Stat man, SFO, minimoke, roger and balance have had any bearing on the ultimate outcome - one thing none of those mentioned have paraded down the main street of Timaru

Enumerate

10-08-2010, 08:20 PM

I think Westerly makes some good points.

The Statutory Management of Allan Hubbard has had a material effect on the recovery prospects of SCF. We are now months into the process. Extraordinary powers have been granted to the Statutory Manager - in the defence of the public interest. We have not had any demonstration of any threat to the public interest ... after all this time ... after extraordinary powers of investigation were granted. No charges ... no hint of charges ... just the implication that Simon Botherway might be conducting a personal vendetta and that Jane Diplock is a fool and Simon Power has lost all sense of perspective and Adam Feeley fancies himself as an American style District Attorney summoning Grand Jury inquisitions at even a hint of impropriety.

At one level, I cannot blame the bureaucrats. They reflect the will of their masters. Central government has turned nasty - in terms of prosecution. Even the MED Radio Frequency unit is considering prosecuting a local radio station that inadvertently broadcast on the Police band due to an equipment failure. No deliberate malice ... an equipment fault ... leading to a prosecution ... leading to the shutdown of a small community radio station.

The failure of the first round of Feltex director prosecutions is a signal on how the courts will treat the new political enthusiasm for "shutting the gate after the horse has bolted".

Balance

10-08-2010, 08:43 PM

Beagle

11-08-2010, 09:38 AM

LOL - how did the hundreds of millions of SCF's bad book come about? Nothing to do with AH of course - it's all somebody else's fault.

Those bad dudes should not have borrowed money off SCF - how was SCF to know that the loans will go bad?

And the orgy of related party transactions which took place in 2008 and 2009? Nothing wrong with that too - it's Michael Cullen's fault for giving a government guarantee to SCF so that AH was able to shift money between SCF and related entities.

AH is blameless - everything he does is and has been kosher.

Happy? AH cultists?

Thanks, guys, I just had the best laugh I have had in a while!

LOL - Yeah Lachie McLeod is the best and most astutue lending manager in New Zealand and his world class loan approval and risk management proceedures have nothing to do with the problems SCF are in.

When will people wake up and smell the coffee and realise that SCF have had extremly poor risk assessment and lending management policies and Lachie was completly blind to the impending wall of defaults brought about by the GFC. He thought, here's a wall of money coming in from the GG approval in late 2008, we MUST lend it out, she'll be right and I'll collect my massive bonus for new lending. The fact that the GFC was allready in full effect in late 2008 didn't seem to worry him at all. The on-going effects from all this poorly controlled lending will continue for many reporting seasons to come, if there are any.

Hamdrew

11-08-2010, 09:41 AM

Alan3285

11-08-2010, 09:59 AM

Looks like things might be kosher after all? Powerless and Bothersome maybe not so kosher....

"Cabinet is bracing itself for the possibility that the Serious Fraud Office's investigation into the affairs of South Canterbury Finance founder Allan Hubbard will not find any evidence of complex fraud."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10665155 (http://http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10665155)

Hi Hamdrew,

Interesting article - are they 'softening up' the media for a potential back down? If not, what is the purpose of such a statement from the govt when they are only a week away from a preliminary report? Not sure myself.

BTW, be careful when you post links - the interface automatically adds the HTTP:// for you, which means if you then paste in the full URL it all goes pear shaped:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10665155 (http://http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10665155)

I usually copy the whole URL from my browser, and paste over the pre-populated bit in the web interface to avoid that happening.

Alan.