Like other such scams, MQA is structured in a Byzantine maze of related parties, crossholdings, loans and sham transactions. MQA's annual report is deliberately deceptive, packed with accounting fraud designed to obscure a very simple business model. MQA's assets generate $49m of cash flows, of which the criminal managers absorb a base fee of $18m. After this 37% fee, the remaining $31m is available for distribution to victim investors. If MQA's share price was not openly controlled by a cartel, it would have collapsed. Instead it was ramped to a $1.6bn market cap, packaged in financial "products" and dumped on granny investors.
As a result of the ramp, the criminal managers entitled themselves to a staggering $58m "performance fee". No magical unicorns or leprechauns need be presumed to explain this straightline ramp. The explanation to this mystery is depressingly simple. A small group of criminals had the power to move the share price, and would benefit handsomely from doing so. So they did.
It is highly likely that the investment cartel that ramped MQA during the past year explicitly discussed their fraud in company emails and on recorded telephone lines, including the exact endpoint of their ramp. Macquarie is a criminal organization that considers itself above the law. But since ASIC operates a zero enforcement policy, this will never be investigated and the criminals will die as free rich men.
Would you accept that you may have more impact if you removed the emotive language from your posts? No doubt you are familiar with the output of professional shorts like Muddy Waters or Gotham, or even Bronte Capital, all of which provide a model. Similar detailed technical reports may also enhance your impact.
ReplyDeleteI think there is too little outrage against pervasive financial crime, not too much. This blog is an exposé of crime, not an "investment case" or any such nonsense, so your comparisons are inappropriate.
DeleteYour post about MQA.AX is apparently based on concern for "granny"investors. However, non-Macquarie professional investors hold 70% of shares, far more than any grannies who are included in the 9% of shares held by investors outside the top 20. If grannies are "victims" then so are the non-Macquarie professional investors. Why would they tolerate being victims? They don't benefit from the fees paid to Macquarie. They cannot all sell their shares at an inflated price, they hold too many. You may not like Macquarie's fees, but they are plainly visible to the professional investors who continue to hold the shares. Where's the criminal conspiracy?
ReplyDeleteThe ultimate owners are granny investors. I.e. when Macquarie or another institutional investor is listed as the substantial holder, they package these holdings into their fund and life insurance products. These products then boast awesome "unrealized" manufactured profits, based on which the fund manager derives fees. The faked performance figures are then used as bait for new victims.
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