InvestSMART

Marked by fated tick of approval

Who can expect to get the next endorsement from the Peter Johnston-headed Association of Independently Owned Financial Planners (AIOFP)?

Who can expect to get the next endorsement from the Peter Johnston-headed Association of Independently Owned Financial Planners (AIOFP)?

The South Australian financial planner that was closely aligned with AIOFP since its foundation, Seagrims Pty Ltd, had its financial services licence suspended by the Australian Securities and Investments Commission yesterday for failing to comply with its obligations under the Corporations Act.

"Between September 2008 and October 2009, Seagrims transferred 972 clients with funds totalling about $105 million into financial products issued by Astarra Capital Ltd, now called Trio Capital Ltd," ASIC noted in a statement.

The name Astarra is now synonymous with the biggest theft of superannuation funds in Australian history.

ASIC said it had also banned the firm's Peter Seagrim and Anne-Marie Seagrim from providing financial services for the next three years.

Peter Seagrim, who happens to be a former president of the AIOFP, remarked in a newsletter in 2009: "The global financial crisis has taught us to work differently and embrace a new era where risk management is a key component of any investment strategy."

SHIFTING SANDS

The ASIC ban is another embarrassment for Johnston, who originally stood by the now disgraced Trio Capital investment manager Shawn Richard. Early last year, he said the treatment of Richard was "disgusting".

At the time, Johnston even offered a $100,000 wager to back up his assurances that the $118 million missing from the Astarra Strategic Fund would be recovered. He later backed out of the offer of the bet made against the Bronte-based blogger, John Hempton, who first raised the alarm over Astarra.

But things seem to have changed. Last month, Johnston described Astarra and Trio to the website InvestorDaily as "a blatant fraud".

Funny he said it was a fraud.

In an email to this paper as late as April this year, he was asserting two counts of dishonest conduct against Richard did not amount to fraud. An email to his members added: "Finally, the FACTS. I stated Richard was not guilty of the fraud that is a FACT."

MONEY PARTY

The fee party at the former Ric Stowe-owned Griffin Coal is expected to continue for some time yet, thanks to a few issues emerging with new Indian owners of the group's former mine assets.

In an update to creditors last week, the administrators KordaMentha noted that plans by Griffin's new owner, Lanco Infratech, to suspend the supply of coal had created a "significant issue" in its attempts to sell Griffin's power station assets to two Japanese buyers.

"A successful resolution of the current situation is anticipated to take some time to achieve [and] will require substantial work that was not anticipated at the drafting of the deeds of company arrangement," KordaMentha explained.

It also noted that the fees related to its administration and the sale of Griffin's assets had reached $43 million. That included $12 million in "legal and other professional fees", $16 million in investment bank fees and $15 million in "administrators' fees and disbursements".

SHARE IT AROUND

The recently retired Fortescue Metals deputy chief executive, Russell Scrimshaw, has wasted little time building his career as a non-executive director after being appointed to the board of the market tiddler, Cleveland Mining.

The Brazilian-focused mineral explorer's chief executive (and Fortescue's former head of "business improvement"), David Mendelawitz , said in a statement that Scrimshaw's "commercial and corporate rigour and international connections will cement the company's strong start".

But it will come at a price. Cleveland said that subject to shareholder approval, it would issue Scrimshaw with 3 million options. The options will be exercisable at a 20 per cent premium to the volume-weighted average price of the company's shares in the 30 days before yesterday's announcement, which was about 30?.

Let's just hope Cleveland shareholders are more supportive of such arrangements than investors in the mining services firm Ausdrill.

At a general meeting last week, more than 44 per cent of the proxies voted against a resolution to grant 1 million options to the recently appointed Ausdrill non-executive director and former Leighton chief executive, Wal King.

Got a tip? Use our online tips box or email srochfort@smh.com.au


Join the Conversation...

There are comments posted so far.

If you'd like to join this conversation, please login or sign up here

Related Articles