Wednesday, 12 March 2014

Mariner starts new revaluation fraud with Yellow Brick Road associates

Mariner (MCX.AX) is a failed investment company that has destroyed hundreds of millions of dollars in investor wealth, while enriching the scheme operators. After years of catastrophic losses and with $1.3m negative net assets in its latest half yearly report, Mariner finally seemed unable to cause more shareholder value destruction. But the decaying corpse of Mariner refuses to stay down, as the listed shell still retains value as a vehicle for securities fraud. Mariner has attempted to launch various revaluation and related party frauds, while propping up the company through related parties including Lemarne Corporation (LMC.AX). Scheduled to buy (and immediately revalue) retirement village assets, the project vendors subsequently pulled out, possibly after realizing the fraudulence of their counterparty and reputational risk involved.

But many others have less compunction about morality or reputational risk. On 28 February, Mariner announced it was "buying" a rental book of plant and equipment assets for $13m, with the vendors financing the acquisition. This allows the vendors to move the assets off the balance sheet, and allows Mariner directors to attach their snouts to the trough of a new rort.

The transaction involved a $11m loan and a $1.85m convertible note. It was also announced on 28 February that a "sophisticated investor", presumably entirely unrelated from the vendor "syndicate of investors", was to be issued 1.5m MCX shares for a $0.15m consideration. Today Mariner announced that Global Clean Energy Finance Pty Ltd had become a substantial shareholder with a 10.9% stake.

Global Clean Energy Finance Pty Ltd lists the same address as the consistently loss-making Yellow Brick Road (YBR.AX), and its company secretary is a principal at YBR, the directors of which routinely engage in related party transactions to enrich themselves, and laughably hold paid seminars for aspiring entrepreneurs.

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