Friday, November 19, 2010

Allied Farmers Ltd: You said what Rob?

CEO of Allied Farmers Ltd [ALF.NZX] Rob Alloway, has decided, now that the shite has hit the fan again with another "asset" inherited from the Hanover purchase going tits up, that the blame for the parlous position he and his company and its long suffering investors find themselves in is because Messrs Hotchin and Watson from Hanover overvalued the assets that the company had on its books at the time of the merger of Allied Farmers and Hanover back in late 2009:

Mr Alloway said the value of Matarangi provided in the 30 June 2009 accounts, used by investors to inform the eventually successful vote to merge, was "unrealistic".

Mr Alloway didn't pull any punches in his statement, and said the state of Matarangi was symptomatic of many former Hanover assets:

“This is an unfortunate trend we have seen with most of the property and loan assets that were acquired, and further calls into question the real value of the shareholder support package contributed by Messrs Hotchin and Watson at the time of the Hanover moratorium. The investment community should have expected far better oversight of the moratorium from Hanovers directors, valuers, trustees and auditors.” NBR, 18 November 2010

Back in November 2009 (almost 1 year to this day) though Mr Alloway was singing from a different song sheet with the will of a man who had crossed all his Is, dotted his Ts and had the champagne on ice:

"We've left behind all the problems ... this is goodbye Hanover, Mark and Eric.

We've got all the assets and anything that's worth anything and said goodbye to the rest, they can deal with the problems. Any litigation or exposure they have is theirs." NZ Herald November 21 2009.

Alloway was also confident that Allied was more able to recover Hanover's bad loans than they were and we all know that was about as successful as Bernie Madoff would be at making a comeback as an investment adviser.

I posed this question back in April and then June, why are Alloway and his fellow directors at Allied not being prosecuted for a fraudulent prospectus? Fraudulent because the prospectus contained overvalued assets on the balance sheet that Hanover and Allied investors based their decision on to vote for the two companies to merge.

Mr Alloway clearly admitted today that Hanover's assets were overvalued (what most people including me said back in 2009 and earlier.) or what he calls an "unfortunate trend", and that these overvaluations were what investors based their vote on.

An unfortunate choice of words.

What the ***k is he now saying?

He knows now what he should have known back in 2009 but is blaming Hanover for the mess Allied is now in?

It is called due diligence Rob, you didn't do it properly pre-merger and now you are trying to cop out of the blame that lies on you and your fellow directors at Allied.

At the very least put your hand up and do the right thing and take some responsibility.

Allied Farmers @ Share Investor

Allied Farmers: Hanover & Allied close mates
Long Term View: Allied Farmers Ltd
Allied Farmers: Rights Issue Decision
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same

Discuss ALF @ Share Investor Forum
Download ALF Company Reports


Recommended Fishpond Reading

Crisis: One Central Bank Governor and the Global Financial Collapse

Buy The Intelligent Investor & more @ Fishpond.co.nz

Fishpond


c Share Investor 2010