George Kerr sold his entire stake in Torchlight Fund No. 1 LP

Brother Pele's in the back, sweet Zina's in the front 
Cruisin' down the freeway in the hot, hot sun 
Suddenly red-blue lights flash us from behind 
Loud voice booming, "Please step out onto the line" 
Pele preaches words of comfort, Zina just hides her eyes 
Policeman taps his shades, "Is that a Chevy '69?" 
How bizarre How bizarre, how bizarre

I was more than a bit surprised when someone broke the news to me that Kerr sold his entire investment in Torchlight Fund No. 1 LP. If fact, at first I did not believe this person. 
Buried on page 73 of the recent 80 page annual report is the revelation that George Kerr sold his entire stake in Torchlight Fund No. 1 LP (TLP). “During the year GCD Kerr disposed of his limited partnership interests in Torchlight Fund No.1 LP as well as his beneficial interest in Heartland New Zealand Ltd.”

 

If the EPIC investment is anything to go by then I wish the remaining Torchlight Fund No. 1 LP the best of luck, because you are going to need it. It includes PGC which increased its stake in Torchlight Fund No. 1 LP in same year George Kerr sold his. 

Destination unknown, as we pull in for some gas 
Freshly pasted poster reveals a smile from the past 
Elephants and acrobats, lions snakes monkey 
Pele speaks "righteous," Sister Zina says "funky" 
How bizarre How bizarre, how bizarre

More worrying is the related party disclosure on page 52 “On 22 March 2012 and 26 March 2012, the Group paid $0.95 million and $0.45 million respectively to facilitate additional investment in TLP by an unrelated party which was guaranteed in full by TLP. This was repaid in full subsequent to balance date.” Why in the world would any investment fund pay $1.4m and guarantee an investment by a third party into its own fund?

Ring master steps out and says "the elephants left town"

People jump and jive, but the clowns have stuck around

TV news and camera, there's choppers in the sky

Marines, police, reporters ask where, for and why

Pele yells, "We're outta here," Zina says, "Right on"

We're making moves and starting grooves before they knew we were gone

Jumped into the Chevy and headed for big lights

Wanna know the rest? Hey, buy the rights...

How bizarre, How bizarre, how bizarre 

Most worrying is that no mention of this related party transaction (George Kerr selling his entire investment in Torchlight Fund No. 1 LP) is made under the related party disclosures by PGC. How the new auditors PWC, the FMA and NZX can allow such a transaction to be considered anything but a related party transaction is beyond me.

PGC and George Kerr need some good luck wishes too, because with this kind of behaviour you are going to need it if you have a hope in hell to list PGC in Europe and Australia as well as raising money there. Clearly the oversight in this market is light touch at best, but you might find the going tougher the further you find yourself from this land. 

Torchlight Sale 1 Related Party 1

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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.