How to lose $22m in 6 months

George Kerr has a reputation for being an astute dealmaker and the following is based on the assumption that it was him and Bryan Mogridge behind the dealing at PGC and Torchlight. Your board under the leadership of Bryan Mogridge is double backing and he is contradicting himself, which ultimately cost PGC shareholders and arm and a leg.

Ratatat-tat -- Another one

It was pointed out to me that until recent events Heartland New Zealand's largest shareholder was Pyne Gould Corp and the fourth largest shareholder is Pyne Holdings. Focus on the corporate structure below.

1. Pyne Gould shares were held by Torchlight Securities (TS), which is 100% owned by Pyne Gould Corp (PGC).
2. Pyne Gould owns only 10% of Torchlight Fund LP1 (LP1)
3. Pyne Nominees is 100% beneficially owned by George Kerr and owns 9% of  LP1 and Mogridge has a direct stake in LP1

It is interesting to note that the money which I assume is being raised to plug the hole in LP1, which was funded by the loan from the cash fund is raised not by selling Kerr's shares in Heartland held through Pyne Nominees, but by selling PGC's Heartland shares held through TS. You would have expected the Heartland shares to at least have been sold down in equal amounts spread between Pyne Nominees and PGC.

Surprised?

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.

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??

IMPASSE - DITTO says New Zealand Shareholder Association

 On 4 May we wrote, "IMPASSE - I Mogridge PASSE - Time for you to leave, Bryan."

Today the New Zealand Shareholder association echoed that sentiment. 

John Hawkins calls for Bryan Mogridge to step down. "Hawkins said that Mr Mogridge as Chairman of PGC and a director of both Perpetual and Perpetual Asset Management at the time was deeply involved in this debacle. In the Associations opinion, along with the other directors he has seriously compromised his obligations toward investors. The NZSA believes the reputational damage is such that he should step down from his other public positions to avoid any collateral damage by association."

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.

Court decision-related party

The following items were pointed out by a reader regarding the recent court decision to lift the confidentiality order on the related party transactions between Perpetual Asset Management and Torchlight Fund LP (1).

a.       On page 5-6 (section 4) George Kerr disclosed he was an interested director due to the fact that he is an investor in Torchlight and could therefore not participate in the board decision. However, it APPEARS that Bryan Mogridge failed to disclosed his 0.166% in Torchlight Fund LP (1) and declare himself as interested and should NOT have participated in the board decision (24.2 (ii) of Target Company Statement)

b.      Furthermore, Henley Downs Village Investment Ltd and Real Estate Southern Holdings Ltd were offered up as security for a loan to Torchlight LP (1) and the court documents seem to indicate that Henley and Southern are owned by Torchlight LP (1), which is contrary to Companies Office filings 1 and 2, which show Torchlight GP (1) as the owner. This is not necessarily a problem, but needs highlighting. 

Bryan Mogridge, "(it) would be foolish"

Lord Francis Jeffrey said, “A good name, like good will, is got by many actions and lost by one“ or maybe it is more appropriate in this case to say, actions speak louder than words. 

Shareholders of PGC struggle to reconcile many things of which most are listed on this blog. It is up to the Board and will be to everyone’s benefit if it would clarify these apparent contradictions. So can the Board please step up and communicate with its shareholders? 

The general feedback we are getting is that the attempt by Bryan Mogridge on 4 May 2012 in his Letter to Shareholders is woefully inadequate. Not one person has said that they deem that communication to be adequate; something for Mr Mogridge to consider. 

Bryan Mogridge

The latest action, a few weeks ago on 17 May, throws up yet another apparent contradiction by Bryan Mogridge and as always we invite him to publicly clear it up.

IMPASSE - I Mogridge PASSE - Time for you to leave, Bryan.

Bryan Mogridge

Bryan Mogridge announced the resignation of PGC's auditor KPMG here https://www.nzx.com/files/attachments/156954.pdf

What readers of this blog find interesting is Bryan Mogridge's choice of words. Apparently PGC arrived at a "technical impasse" on certain matters. You know, those famous words were not "Houston, we have a technical impasse" they were "Houston, we have a problem", a credibility problem. You clearly choose to ignore the history that led to your "technical impasse".

Will the real men in this country please stand up!

I was appropriately moved by the following piece that was brought to my attention today. The piece is copied below; read it first before you continue. My role at this blog is to convey what others think rather to "say" what I think, but I have something to say and I am going to say it.

PGC is such an obvious case of gross mismanagement and total abuse of power and the paralysis by the businessmen in this country perplexing. I absolutely agree with  Chris Lee that George Kerr should not be allowed to run or be the director of a public company and neither should Bryan Mogridge. To allow him to be classified as an independent director is laughable (see this blog for details).

Letter to the auditors of PGC, Heartland, PGW

So KPMG resigned. Wow, that is great news! Find the press release below and then continue to read.


Some time ago, one of our more experienced (in investment matters) readers told us about a strategy that sometimes yield interesting results.

If you have serious doubts about a company's financial statements then you write a letter to the auditors of a company highlighting the relevant issues. You can do this either as an open letter or as private correspondence, but if it is private then you make it clear you reserve the right to later publicise the letter. If you deal with auditors with half a brain cell then generally the end result is that the auditors put in double the effort to ensure they are comfortable signing off due to the implications of being forewarned.

Open letter to the NZX and FMA

The letter below went out to the NZX, the FMA. A reporter and Bryan Mogridge was copied on this letter. I will post any replies.

Cheerio!
jA

HNZ and PGW shares secure loan to buy more Heartland shares.

We promised to start digging in our previous post and guess what? Dig and you will find!

We believe the reason Bryan Mogridge specifically and the Pyne Gould board, at the time made up of George Kerr, Bruce Irvine, John Duncan and Mogridge, changed their story is because although they promised to return the assets “surplus to core business requirements” (cash, PGW and Heartland shares), they used it as security to a loan to purchase more Heartland shares.

Someone was kind enough to send us the following information with the following advice,

If you are in a hurry and assume someone is trying to hide something in a dustbin then a bright spark will turn the bin upside down and dig through the garbage from the “bottom up”; read this report starting on the last page. 

Bryan Mogridge on selling PGW- "Selling..would be foolish"

On 7 March the board announced the sale of 19.1m shares in PGW.

This action raises a significant question mark over the credibility of the board in general and specifically its chairman Bryan Mogridge. Here is why.

On 1 November 2011 the PGC board’s chairman, Bryan Mogridge said the following, at PGC’s AGM.