Torchlight Securities - Rat in me kitchen

The UB40 song goes;

There's a rat in me kitchen what am I gonna do?

There's a rat in me kitchen what am I gonna go?

I'm gonna fix that rat thats what I'm gonna do,

I'm gonna fix that rat.

Speaking about fixing, what exactly is being fixed right under shareholders’ noses?

Think! Thiiiiiiiiiiiiiink about id!

The FMA is kicking up a big fuss about Kerr, Mogridge, et al using a Perpetual Trust vehicle to patch a hole at Torchlight Fund LP 1 and rightfully so.

But what is happeniiiiiiiiiiiing??

Could Kerr, Mogridge, Tinkler et al simply be robbing Peter to pay back Paul? Are they abusing another part of the Pyne Gould empire to plug the hole?

Take a look at the structure (see below)

Torchlight Fund LP 1 (LP 1) is only 10% owned by Pyne Gould and both Kerr and Mogridge have direct beneficial stakes in LP 1. LP1 borrowed money from Perpetual’s Cash/Mortgage fund and that cash went into LP1. However, now the FMA is all over them. So how are they paying back Perpetual’s Cash/Mortgage fund? You would expect LP1 to come up with the money to pay back Perpetual’s Cash/Mortgage Fund and most people assume that is what is happening because they read in the filings that Torchlight is selling HNZ and PGW shares and we all assume we know where that money is going….to pay back Perpetual’s Cash/Mortgage fund.

Think again!!

Pay close attention. On 1 Mar 2012 a new company is established called Torchlight Securities Limited with Kerr and Tinkler as directors and 100% owned by Pyne Gould ultimately. Then on 13 Mar all HNZ and PGW shares are transferred from Pyne Gould to Torchlight Securities.

Now we see from the recent filings Torchlight Securities is selling PGW and HNZ shares. So it seems Kerr, Tinkler, Mogridge, et al are using Pyne Gould money to pay back the loans that LP1 (only 10% owned by Pyne Gould) owes to Perpetual’s Cash/Mortgage fund.

It begs the obvious question. What is happened to the cash that LP1 got from Perpetual’s Cash/Mortgage fund? Is it not sitting exactly where they wanted it, in LP1? Actually no, even that is not true. The money has already been shipped out of the country to fund deals in Australia.

Cheerio!
jA
Anderson Cooper once said, I think it's a good thing that there are bloggers out there watching very closely and holding people accountable. Everyone in the news should be able to hold up to that kind of scrutiny. I'm for as much transparency in the newsgathering process as possible.