Balance - the date of your press release is 03/12/2010. $8.5billion has gone west ... surely even you can see that some diligence in 2006 could have prevented the heavy workload of 2010.
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Balance - the date of your press release is 03/12/2010. $8.5billion has gone west ... surely even you can see that some diligence in 2006 could have prevented the heavy workload of 2010.
The past is past - nothing can be done. Everyone would agree that it was an absolute disgrace that the regulatory bodies and the Labor government sat on their hands and did nothing.
Thank goodness they moved on Allan Hubbard in time however. Can't have it both ways - blame the past for inaction and then, blame the present for proactive preemptive action.
BTW, where did you get the $8.5 billion from? Check your numbers and you will find the real losses are significantly less than that.
Read my post carefully.
"Thank goodness they moved on Allan Hubbard in time however. Can't have it both ways - blame the past for inaction and then, blame the present for proactive preemptive action."
The horse had bolted with the other finance companies when the Securities Commission and other regulatory bodies sat back, drew big salaries and did nothing.
The super regulator now takes over for the future - that is a good thing.
As to 'this never happens again' - NOT in 100 years, matey. Look at US - Madoff? Worldcom? Lehman? etc.
Well I had a good laugh yesterday when I caught up on this thread. Nothing much has changed and I really would have thought you'd both have something better, (more profitable), to do with your time, but its still amusing to see Balance and Enumerate slugging it out. I'm definitly still in your camp Balance and agree with much of what you've said.
My position hasn't changed, AH is sick and silly old dellusional fool who had no idea how to run his business when the GFC came along and neither for that matter did Lachie Mcleod and they grossly mismanaged the business into the groud with all the foresight and perception of two blind drunks. I am really looking forward to the principals of natural justice playing out against these two and the other directors of SCF, not to forget Sandy Maier's role, "oh yes we're breaking even", (blatant fraud so he could keep the company going to collect his salary package). I hope they all get prosecuted and I hope investors in SCF preference shares who have sufferred massive losses sue them personally.
It'll take a whole new generation of investors before the inevitable upswing in finance companies yet again. Hopefully long before then the Judiciary will have run out of wet bus tickets, the Securities Laws will have been re-written and there will be serious terms of inprisionment appropriate for the mass devistation these finance company directors have inflicted.
So, clearly, you have no idea what "natural justice" is let alone what a principle is ...
Again, clearly, you do not know what Maier was attempting to do nor what he achieved. Instead, you assert that he was acting with criminal intent (to defraud). You really should be more careful about making unsubstantiated, actionable, statements.Quote:
... not to forget Sandy Maier's role, "oh yes we're breaking even", (blatant fraud so he could keep the company going to collect his salary package). I hope they all get prosecuted and I hope investors in SCF preference shares who have sufferred massive losses sue them personally.
I am not surprised that you and Balance see "eye to eye" on this matter. I am simply grateful that you do not agree with me (otherwise I'd have to carefully check my premises).
Natural justice in this context is you get what's coming to you, I'm not trying to define its strict legal meaning, and I'm sure most bloggers got the gist of the comment.
Maier dragged out the inevitable. At very best his comment was made with gross recklessness, investors relied on it and many people such as yourself were burned. I believe there was deliberate intent to deceive the market and am happy with calling it as I see it, besides Maier will be far too busy trying to cover his own arse than to take me on for my comment.
You may have a greater skill with legal definition's, but your memory and perception seem to be failing you, so perhaps I should remind you that after your thorough analysis you were the one who got burned by this fiasco and after my thorough analysis, I decided to get out before the Government guarantee repayment and was happy with my 10.25% return.
My old man once said money was the root of all evil .... and when you hear some of the stories about what was going on in Timaru you hope they are just stories - after all only bar talk but the money go round was really spinning if their is an semblence of truth in the stories
It ain't over yet.
In receivership - the secured creditors have control. However, in liquidation, the Pref holders have the opportunity to dump the Receiver and to consider legal action against the Trustee, the Receiver and any party advising in the sale process (if there have been some fun and games around the disposal of the assets). If there are any discounts offered in the assets sales - the Receiver may have a case to answer. Somehow I can't imagine Mr Hubbard being willing to allow the Receiver to "rubber stamp" liquidation.
I would remind you (since it seems your memory and perception seem to be failing) that Plan A for the Prefs recovery was "the deal" - but failing this there is the possibility of Plan B - recovery post receivership. The government's move to takeover all secured debt and to continue allowing SCF to trade means that they have responsibility for events since August. They have already left one major opportunity for Pref holders, on the table (forgive me if I keep my "powder dry" on this); so they are not quite as smart as they think.
All the above may well be fine in theory...but in the real world where you can't sell assets for anything like their theoretical worth, I am certain you will find the Governments main mission is loss mitigation. They've kept SCF trading, trying to lend out small loans because there's a reasonable chance they may lose a bit less doing this, but there's little if any demand for credit.
I really don't think you have a grasp on the reality of the situation in the economy out there in relation to the real realisable values for assets. That would be actual sales of assets for cash, (not part exchanges for equity or some other form of masterful revolving door transaction for which Mr Hubbard has completly re-written the how too book in New Zealand). In many parts of the country land values have halved and even worse and that's if you're lucky enough to find a cashed up buyer, or a buyer who can manage to get bank finance at reasonable rates.
Don't worry though Enumerate, your not the only person for whom this reality hasn't dawned, I can think of a number of Directors in SCF, Alan Hubbard, Lachie McLeod and Sandy Maier who seem to have been under the mistaken impression that the GFC was an acronym for something completly unrelated to its real meaning.....perhaps, good farming community ?
As to the value of any potential sale of the so called good bank part of SCF in due course, here's the bottom line as us accountants are so good at saying, Investors will not deposit funds with finance companies when there's even the very slightest hint of any doubt, the high leverage game is over and finance companies will have to fund their business in other ways, e.g. a very high capital ratio, there's a novel idea, perhaps as high as 20-30% and until investors see ultra conservative lending policies, ultra conservative capital ratio's i.e. shareholders actually putting their own money on the line to a respectable degree, and consistent profits, there's not a snowballs chance in hell of attracting decent level's of debenture funding especially if the business still carries the name of say South Canterbury Finance or Geneva Finance for that matter either. Perhaps Geneva finance could make a scrip based takeover for SCF's good book and offer the Govt 5 billion shares at 5 cents each LOL.
Of course its only human nature to cling on and hope one hasn't done one's chips completly in a terrible situation but quite frankly on any objective analysis I'd say your situation is dramatically more hopeless than that of Pike River shareholders and quite frankly they're comprehensivly snookered too.
Dude, do yourself a favour and have a good look at Pan Australia code PNA - Trust me on this, There are better, more enjoyable and more profitable ways to spend your time than raking over the coals in this SCF mess.
Why do you bother trolling on the SCF thread when you don't hold, don't read the book, don't analyse the available numbers and don't really care about the wrong done to Mr Hubbard?
Reinforcing what you wrote - http://www.nzherald.co.nz/nz/news/ar...ectid=10691974
Boom in coastal properties funded by finance companies - bust now taking values back to 2003 levels. And there are bugger all buyers around.
Enumerate, your optimism is something to be cherished in these difficult times. With SCF, an earthquake and Pike River 2010 has, to paraphrase the queen, been a horrible anus.
As we come to a new and hopefully more prosperous year we should, I hope, open this thread up to anyone who wants to learn from the past before punting on the future.
I'll hopefully be reading the book over summer but I have to wait for it at the library. I won't be paying for it as I just see that as putting more good money after bad.
As an exchange for your literary recommendations heres my list of light reading for you over summer. Its "free" and you don't even need a library card. These links will provide you with the Receivers reports on SCF:
http://www.scf.co.nz/news-documents/...ory-report.pdf
http://www.scf.co.nz/news-documents/...ory-report.pdf
http://www.scf.co.nz/news-documents/...ory-report.pdf
http://www.scf.co.nz/news-documents/...ory-report.pdf.
I'm reminded of one of the quotes in another report "SCF’s preference shares are not covered by the Crown’s Retail Deposit Guarantee Scheme and the claims of SCF’s shareholders (including its preference shareholders) rank behind the claims of SCF’s secured and unsecured creditors." If your divination of the numbers gives you a rosy picture I can only assume you take the same comfort a terminal cancer patient has of travelling to Tijuana for a Zoetron treatment.
Without wishing to extinguish your optimism, but in the spirit of providing a dose of reality heres a quote from a media release: "Although the receivers say that at this stage it is too early to assess the likely outcome for unsecured creditors, preference shareholders or ordinary shareholders they say that the second phase of the unwinding and sale and realisation of assets is proceeding at a responsible pace to deliver the optimal outcome for the Crown and other creditors" The last 10 words are the key ones!
Moving on now to the things Mr Hubbard has done, here is a bit more light reading.
http://www.grantthornton.co.nz/First...rt-12-July.pdf
http://www.grantthornton.co.nz/Secon...6-Aug-2010.pdf
http://www.grantthornton.co.nz/Third...1-Oct-2010.pdf
http://www.grantthornton.co.nz/Fourt...8-Oct-2010.pdf
http://www.grantthornton.co.nz/Fifth...5-Nov-2010.pdf
I'd recommend these ones - its a bit like a good John Gresham novel. lots of twists and turns, you may not be sure who the baddy is and you don't know the outcome until the final chapter is written.
And on that note I'll leave this post with this quote from another report: "Potential breaches of legislation that are identified during the course of the receivership will be reported to the relevant regulatory authorities. Due to the ongoing nature of the investigations, we are unable to provide details regarding individual issues or our findings since doing so could prejudice any subsequent proceedings which may be taken."
This is the greatest financial collapse in modern times, I got out by the skin of my teeth and had over a third of a million dollars invested so I'm sure you'll excuse me for having a passing interest in the eventual outcome and then there's the professional interest in how extremly creative Mr Hubbard and his directors have been in their so called accounting "standards", treatment of so called tax assets, extremly creative information put to the markets and so on that I've blogged about earlier....and then of course there's your amusing comments and then there's the reality of what's to come in terms of litigation and prosecution.
I'm not concerned with how it impacts Alan Hubbard, I'm concened about how the manner in which these entities have been "managed" (which I consider to be at very best, trading with gross recklessness) impacts others including the taxpayer.
There's plenty there to keep one's professional interest and curiosity perculating away.
"The book", is not an appendix to the bible, as suggested by the strength of some of your comments and frankly I'm far more interested in how real professionals assess the situation, my thanks to you Minimoke for providing all those links to genuine professionals independent analysis of the situation, i.e. some real non-fiction reading for the holidays.
Hi Balance, yeah some good stuff in that article and thanks for that link which re-inforces what I'm hearing from my friend who's the CEO of one of the major Australian owned real estate business's, also a top auctioneer and I get the good oil on a regular basis straight from the horses mouth. Anyone unluckly enough to own expensive coastal property and in a position of having to sell is in for a very harsh reality check.
Sheeting this home to SCF's loan book, one could easily be forgiven for speculating that a very high percentage of their loans, (those that are actually secured), have grossly inadequte security by current realisable value standards, i.e. lots more losses to come from the bad, and so called good loan books.
I reckon the Govt will lose $600-$1,000 million when its all said and done but will probably try and conceal the real figure until after next year's election.
I'm waiting for the inevitable book that Wishart guy will come out with
Knowing him he'll go beyond all the financial shennagins and probably come up with stories of money laundering, drug running, arms dealing etc etc operations out of Timaru ....... you never know what he will dig up ....... should be a good read
Mini, I recommend an excellent book to you and you repay me with recommendations for all this old boilerplate! How many months and how many millions - and not even a balance sheet that could explain what happened between the half year and the end of year (let alone the financial state at receivership).Quote:
Originally Posted by minimoke
I am not really sure that the SCF Receiver is up to the task. Fortunately, this is a question that I will get to consider in some detail when they attempt to liquidate SCF.