QUINTIS
In January 2018 ASX listed sandalwood grower Quintis went into voluntary administration
Prior to this Quintis had been:
o Unlawfully targeted through abuses of algorithmic trading and short selling over a period of several years. Unlawful trading resulted in manipulative control over the share price and severe undervaluations.
o Attacked by the predatory short seller Glaucus (Glaucus has now been slammed by an Australian judge for putting out misleading reports to damage share prices
o Attacked by the Financial Review journalist Vesna Poljak who consistently wrote negative articles about the Quintis founder Frank Wilson
o Attacked by its own board - After Frank Wilson resigned, the remaining board lost contracts and reduced the price of its own sandalwood by one third to its main customer.
o Attacked by its own Chief Financial Officer - Alistair Stevens failed to disclose the correct financial reports which allowed the company to be put into voluntary administration.
Once in Voluntary administration a large offer was made by Frank Wilson and associates to save the company for shareholders and get it back making profits again. This offer was flatly rejected by Blackrock. Blackrock then took the company for themselves, reinjected some capital which it didn’t actually need, and now have a very valuable company.
All the time Frank Wilson acted in the interests of shareholders.
Under administration, Blackrock put forward arrangements that would wipe-out shareholder value – they eventually succeeded. Shareholders were left with nothing. At the time, control over the Company was increased by providing loans at high interest rates. The big unknown is whether or not Blackrock or their affiliates were connected to the Glaucus short sellers. A follow the money approach would certainly clarify if insiders were active or whether there was criminality involved in the Company's demise
All of the allegations by Glaucus have turned out to be false just like in the case of Rural Funds which was attacked by the short seller Bonitas (a company also founded by the founder of Glaucus)
Frank Wilson was on side with shareholders and had skin in the game. He owned 13% of Quintis.
ASIC is suing Frank Wilson for allegedly failing to discharge his duties as a Director. It is a charge unrelated to any of the events that caused Quintis to go into administration. It is related to the termination of a non-material contract which ASIC claims he should have known about and informed the market. The charge came after Frank Wilson defied Blackrock and tried to protect his own assets and those of his shareholders.
Had ASIC and Mr Wilson's ex directors Dalton Gooding , Gillian Franklin, Michael Kay , John Groppoli and Julius Matthys sought to serve shareholders by suing Glaucus for their blatantly false and misleading short selling report , rather than Mr Wilson , Quintis shareholders would still own the company rather than Blackrock
GENETIC TECHNOLOGIES
In 2014 Dr Mervyn Jacobsen was jailed for a year for manipulating the sharemarket. He was charged under section 1041A of the Corporations Act - setting and maintaining artificial prices.
Dr Jacobson was the Founder and Chairman of Genetic Technologies, which held valuable patents for DNA and breast cancer testing.
Dr Jacobsen had confidence in his own company and took out a sizeable margin loan in order to purchase shares in the company on the market.
After Jacobsen’s buying was completed, the share price was heavily targeted, presumably by short sellers with knowledge about the large margin loan. Margin loans contain a trigger clause. If the price falls to a certain level, then extra collateral has to be supplied to restore lending margins. The price where the loan was at risk was around 34 cents. If collateral isn’t available then the lender has the right to sell-down into the market until the required lending ratio is achieved. In thin markets, such selling can result in substantial price falls.
Short sellers stood to make substantial gains by deliberately forcing prices lower to trigger margin limits.
Dr Jacobsen fought back against the short sellers. He bought shares with his own money and in his daughter’s name to maintain prices at around the 35 cent level over a period of a couple of months.
ASIC then charged Dr Mervyn under section 1041A for manipulating the share price. He was sentenced to 42 months jail. Yet he was merely trying to keep the share price defended against the actions of predatory short sellers. And by opposing manipulative short sellers his actions were in his own best interests but also in the best interest of genuine shareholders.
Who was really the one breaking the law here?
BELLAMY'S
In 2019 Bellamy’s was taken over at its lowest share price for the year by a Chinese Government owned corporation. The Bellamy’s takeover holds all the usual trademarks of a well-orchestrated takeover.
o It had directors who allowed it to happen and who were looking for a takeover.
o It had a Chinese government owned company involved.
o It was the number one shorted company for a period leading up to the takeover
o There is evidence of manipulation of the shareprice in terms of government policy as Peter Whish-Wilson, Pauline Hanson, Jacqui Lambie and Barnaby Joyce pointed out.
o There is very compelling evidence of high levels of share price manipulation in daily trading. It involved streams of small trades generated by broker automated trading programs continuously making artificial adjustments to prices. Such trading enables absolute control over prices. However, such trading also conflicts with Section 1041A of the Corporations Act; the same law that saw Dr Mervyn end up in jail.
When the Chinese takeover for Bellamy’s came there was only one lady who could stop it - Jan Cameron the Founder of outdoor store Kathmandu who held 17% of Bellamy’s.
This is a lady who has previously spoken of the danger of allowing Chinese access to our food security. She said this about the sale of Australia’s biggest dairy farm to Chinese business interests.
“It is extremely disappointing, and typical of the ill-considered decision-making coming out of both the Liberal and Labor parties,” she said.
“These parties are so short-sighted, they don’t realise that they are compromising Australian food security for the long term.”
Ms Cameron said Australians can’t control properties or products they don’t own.
“With the supply of milk and our dairy products in general – we don’t know what the Chinese will want to do with these products in the future,” she told 3AW.
“I know they have contracts at the moment but that could change – there’s virtually no plans to add value to the product so it will be shipped to China in the form of milk powder. So there’s not a lot of economic gain in this situation for Australia.”
“It has such an enormous appetite for our fantastically beautiful products and they can absorb just about all of our production or more. Ms Cameron said Australians had “no idea” how much of the nation’s land was in foreign hands.
“At a brief meeting I had with (Agriculture Minister) Barnaby Joyce, he told me that 80 per cent of all irrigated land in Queensland was foreign owned and about twice the of the size of Victoria in farmland was owned by foreigners.
“(This) is giving over control of our properties and our future for where we’re going with the properties – we’re becoming serfs of the Chinese Government.
With this lady standing in the way of the Bellamy’s Chinese takeover , what then transpired?
Jan kept quiet for a long period. There was immense pressure on her. This was an orchestrated takeover involving many layers of corruption from both governments, along with a heavily manipulated share price.
So what would happen to her if she stood in the way? Perhaps the same thing that happened to Frank Wilson and Mervyn Jacobsen for standing in the way of the market manipulators?
And it did.
Very recently ASIC laid criminal charges against Ms Cameron, the former director of infant formula maker Bellamy’s Australia, for allegedly failing to disclose her links to a major investor in the company. Effectively, she failed to disclose her substantial shareholding in Bellamy’s, an offense under the Corporations Law.
The charge is the same one that ASIC should have applied to American politician Chris Collins, as per the recent 4 Corners program. Collins was involved in insider trading as well, and was prosecuted by US regulators. ASIC simply dismissed all concerns regarding Collins.
"It took Mr Collins nearly 18 months to file his first substantial shareholder notice, when the law requires you to file that notice within two business days so that was a clear violation of a criminal law," James Wheeldon told Four Corners.
https://www.abc.net.au/news/2020-02-10/inside-story-behind-chris-collins-downfall/11929048
The three cases show how extensively corrupted our financial system has become. It is not likely to be a coincidence that ASX operations and regulation by ASIC favours the big-end of time. Sadly, the cases are just the tip of the massive iceberg that represents malfeasance on the ASX.