CBD
Weevils, feng shui and plunging sales: more details of Tony Ferguson Weight Management's belly-flop have emerged (see CBD, Wednesday).
CBD has been told the company, which sold weight-loss shakes, soups and meals through chemists, had to recall one product earlier this year because of potential weevil contamination.
It is said sales had slumped, from about $70 million in 2009 to about $20 million last financial year. And there are unconfirmed reports that expenses were big-boned, with the company lashing out on a feng shui consultant to rearrange the office.
The seven companies in the group are now in the hands of administrator Adam Farnsworth, who declined to talk to CBD.
In a statement, he said the group was continuing to trade, and its directors - Tony Ferguson, Barry Smorgon and John Tisdale - were considering cooking up a deed of company arrangement to regain control of the group. It's the attitude of Smorgon that will be crucial. Sources say he got his 49 per cent shareholding as part of a rescue deal in 2011 that saw him take equity in return for forgiving money owed because his company Jalco was the group's main supplier.
Unspookable?
Clients of Nicholas Moore's Macquarie Group may soon have a new government agency overseeing their correspondence with the millionaires factory: the US National Security Agency.
CBD has heard that to try to slash costs Macquarie wants to ditch its email servers and move to the Gmail service provided by tax-dodging tech behemoth Google.
In addition to its habit of not paying much tax, Google has also been revealed as one of the main sources for the NSA's no-longer-secret data hoover Prism.
While no customer email has yet been committed to Google's porous servers, sources say that for
about six weeks several senior executives have been experiencing the joys of Gmail in a test environment.
That means clients are not yet having their financial secrets pored over by spooks - unlike hacks at BusinessDay owner Fairfax Media, which moved to Gmail last year.
Rental handicap
It had $2.5 million in the bank last time anyone counted, but that has not stopped listed cash box Lemarne Corporation being thrown out of its office on busy Punt Road after the rent wasn't paid. Lemarne shared its registered address with several companies associated with Ariel Silman, a Melbourne businessman who, with his father, owns 30 per cent of the company.
According to a notice plastered on the door by the landlord, a Silman company, Global Constructive Solutions, holds the lease but has not paid the rent since June 3. The locks were changed on Friday, presenting yet another headache for new chairman Darren Olney-Fraser.
After a call from CBD on Wednesday, Olney-Fraser changed the company's registered address to his city office. Although he was appointed on August 13, he does not yet have his hands on the books and records of the company, which were last seen at the Punt Road office. "These are the things I've been brought in as an independent chairman to fix and I'm fixing them one at a time," he said.
However, he said he had secured Lemarne's only asset, its cash pile.
"I changed the bank account signatories the day I was appointed," he said.
Big navy blue
New South Wales Premier Barry O'Farrell is keeping up the barrage in his attempts to stop PM Kevin Rudd moving navy ships from Sydney to Brisbane. "While Kevin Rudd's trying to stop the boats, I'm trying to keep them in Sydney Harbour," O'Farrell told an Australia-China Business Week function on Wednesday. (BusinessDay is a sponsor.)
Got a tip?
bbutler@fairfaxmedia.com.au
Frequently Asked Questions about this Article…
Tony Ferguson Weight Management, the company that sold weight‑loss shakes, soups and meals through chemists, fell into administration after sales slumped and operational issues emerged. The group reportedly had to recall a product earlier in the year for potential weevil contamination, sales fell from about $70 million in 2009 to about $20 million in the last financial year, and seven companies in the group are now in the hands of administrator Adam Farnsworth.
The article links a product recall for potential weevil contamination and a sharp sales decline—from roughly $70 million to about $20 million—to the company’s difficulties. Those kinds of operational problems and falling revenues typically undermine investor confidence and were factors in the group ending up under administration.
The company’s directors named in the article are Tony Ferguson, Barry Smorgon and John Tisdale. Sources say Smorgon’s attitude is crucial because he acquired a 49 per cent shareholding as part of a 2011 rescue deal in which his company Jalco, the group’s main supplier, forgave money owed and received equity in return.
According to the administrator’s statement reported in the article, the group was continuing to trade and the directors were considering 'cooking up a deed of company arrangement' to regain control of the group. The article does not report a final decision or outcome.
The article says Macquarie is exploring shifting its email from internal servers to Google’s Gmail service to cut costs and has been testing Gmail with several senior executives for about six weeks. That raises privacy concerns because Google was identified as a major source for the NSA’s Prism program, prompting questions about potential access to client correspondence if emails are moved to Google.
No customer email has yet been committed to Google’s servers, the article reports. The Gmail use so far has been in a test environment for several senior executives, so clients’ financial correspondence had not been migrated or exposed via Gmail at the time of the article.
Lemarne was locked out after rent wasn’t paid at its Punt Road address, which it shared with companies associated with Ariel Silman. The lease is held by Global Constructive Solutions (a Silman company) and, according to a notice on the door, had not paid rent since June 3. New chairman Darren Olney‑Fraser subsequently changed the company’s registered address and says he has secured Lemarne’s cash by changing bank account signatories, though he has not yet obtained the company’s books and records.
The article highlights several investor red flags: major and sustained sales declines, product recalls and operational problems (for example, a weevil contamination recall), heavy or unusual expenses, related‑party supplier arrangements that led to equity swaps (such as the Jalco/Smorgon rescue deal), companies entering administration, and governance issues like unpaid rent or missing books. These are the sorts of issues that can materially affect a company’s financial health and should prompt closer scrutiny.
Call 1300 880 160
Start a chat
Schedule a call
