Biotech Capital (BTC.AX) is yet another listed investment scam with book assets valued entirely according to the "opinions" of the operators. In its 30 October net tangible asset disclosure, BTC fraudulently claimed an NTA of $0.0416 based on director opinions, despite its auditor refusing to sign off on this entirely imaginary valuation in the annual report. In the November 30 NTA disclosure, BTC then announced a 56% downward revaluation of NTA to $0.0181, with its only remaining investment slashed to a third of its previously carried value. Any investor that based a purchasing decision on what was a blatantly fraudulent October NTA disclosure is simply out of luck, and shouldn't have expected such petty details as fund asset disclosures to be regulated in any way by ASIC. BTC currently has a "market" price of $0.025, according to ASIC due to an entirely inexplicable magical market mystery.
http://www.asx.com.au/asxpdf/20131101/pdf/42kl1k9ylcvqt0.pdf
http://www.asx.com.au/asxpdf/20131203/pdf/42lbxjtkmscc05.pdf
BTC now has book assets of $1.4m, with incumbent management extracting around $0.4m a year in cash from the remains of the failed company, obscured through deceptive accounting. The directors extract this $400K because they have control and can do so. BTC claims to be in wind-down and would thus appear to be approaching the end of the line. However, it is a very safe bet to assume the criminal operators of this scheme will miraculously find a great new opportunity for issuing shares to granny investors instead of closing up shop.
Just as BTC carried its investment in unlisted Sensear at a deliberately inflated value, so fund managers continue to carry BTC at values they well know are inflated. This is securities fraud, with inflated assets laundered through a chain of holdings. Select Asset Management currently holds 23% of BTC through a melange of funds, and carries its stake at an inflated "market" price, despite being well aware it could not actually sell its holding at that price.
In October, Select Asset Management claimed to have sold 3.5m shares of BTC for $734,469, for a sale price of $0.209, ten times the price that BTC traded on the ASX.
http://www.asx.com.au/asxpdf/20131022/pdf/42k6tqxmpc0dqj.pdf
This is either a typo that no one noticed because ASX disclosures are in effect unregulated, or another magical market mystery.
Ha! Sounds like a share - sorry gold mining company, calling a hole in the ground that doesn't produce any gold, an asset. I'm looking at you HEG.
ReplyDeleteSomething I didn't mention previously. The record increase in ES balances with the RBA in November has been concomitant with a near record monthly increase in the RBA's total liabilities. The RBA is inflating hard.
As such I'm surprised to see the ASX falling & the AUD falling significantly. I'm beginning to wonder whether there isn't something going on in the background internationally. Current political instability in Thailand, Ukraine is a sure sign of credit crises. So far there hasn't been any movement in the money market here, but that just makes an international explanation of the falling AUD more likely.
Of course the Liberals are renowned inflators of the currency, it's possible the RBA is being lent on to feed the cancer.
That's very interesting, Scrutinizer. It sure feels like something has to give. On the other hand it's felt like that for a long time.
DeleteThis is from http://www.prudentbear.com/2013/12/the-countdown-to-year-end.html#.UqL6xSdc4-0
ReplyDeleteOne of the best sources of information on global credit IMO. The operations of the RBA over November hint at something more extreme than a little EM (emerging market) instability however.
This week saw the MSCI Asian Pacific equities index drop 1.8%, the biggest decline since August. Australia’s main equities index was hit for 2.5% and New Zealand stocks were down 1.7%. Australian 10-year bond yields jumped 21 bps to a 25-month high 4.44%. Singapore stocks fell 2.0%, and South Korea’s Kospi sank 3.2%. Turkey’s major equities index fell 3.1% this week. Argentina’s Merval stock index was hammered for 6.77%.
EM instability has returned – in some cases with a vengeance. Brazilian (real) yields closed Wednesday at a multi-year high 13.27%, up 190 bps from early September lows. Other EM problem children also saw bond yields spike higher. Indonesian 10-year yields ended the week at 8.64%, up from the October low of 7.0% and not far from September highs (8.93%). Indonesian yields began the year at 5.19%. The Ukraine has become another EM worry. Ukraine’s dollar yields jumped from 9.40% on November 25th to 10.38% on December 3rd (after trading at 6.86% in early-March). After ending October at 7.16%, Russian (ruble) yields jumped this week above 7.90%. After trading down to 8.20% in late-October, Turkey’s 10-year sovereign yields this week returned to 9.60%. South Africa saw 10-year yields jump from October lows of 7.30% to above 8.10% this week. Almost across the board, EM yields have risen over recent weeks.
Weirdness abounds. Could it be the dawning realization at RBA that we can't all work in financial services pushing debt and fees?
DeleteSaw there was some recent drama at your favourite company, involving some familiar names:
http://www.asx.com.au/asxpdf/20131206/pdf/42lfzvf74lfh90.pdf
I doubt it. The RBA monetises MBS & other junk only because it is not trading money enough in the market, the idea is to narrow money market spreads ie. inflate the financial markets, thus more debt & fees. Whether this is a response to international events or just the new Liberal government leaning on the RBA I can't tell. Of course this weakens the credit of the RBA, but few understand the $ is bank credit. It's not just the ASX that's a Ponzi scheme.
ReplyDeleteHEG is a fraud, they did produce a small amount of gold but were in no way profitable. Yet they still manage to issue shares to more suckers, mostly Chinese lately. Maybe Ian & Bruce got the boot in favour of some Chinese appointee.
Did you read this article?
ReplyDeletehttp://www.zerohedge.com/contributed/2012-19-10/philipp-bagus-insolvency-fed
It is one of the best ever posted by ZH. Worth reading, more than once. Philip Bagus is one of the few who actually understands how the credit of a bank can trade 'money good'.
Good read, thanks for the tip!
Delete