The Secret Broker: In Curacao we trust? Not happy Jan!
The Secret Broker
After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.
As we come round the corner and head towards Christmas day, I noticed a couple of interesting developments in the Australian financial landscape this week.
Firstly, the backdoor listing of Chemist Warehouse and secondly the court’s finding that Jan Cameron was guilty of hiding her influential ownership of Bellamy’s Australia.
Jan is financially famous as an owner of the clothing company Kathmandu and at one point, she was also the fourth richest woman in Australia.
However, ASIC took her to court over her ownership or non-ownership of 15% of Bellamy’s and her lodgements of substantial shareholding notices to the ASX.
The 15% of Bellamy’s were held in a trust that had been set up on the Island of Curaçao, which is also where they produce the famous blue drink.
Another thing that you may not know is that Curaçao is also famous for issuing lite touch Gambling licences and that a crypto casino like www.stake.com uses Curaçao for their gambling licence, even though they are headquartered in Melbourne.
The billionaire founders of Stake.com recently popped up as having a 5% plus shareholding in the ASX-listed Pointsbet (ASX:PBH). Pointsbet’s gambling licence is licensed in the Northern Territory by the Northern Territory Racing Commission.
So Stake.com is blocked to Australians punters but PointsbBet isn’t.
Who knew that a little Caribbean island could cause so much trouble in Australia?
The problem that Jan had was in the grey area that surrounds things that are held in trust, as one can never be too sure who actually controls its underlying assets.
The estate of the late Michael Hutchence found this out, as even though he lived in mansions and drove Bentleys, he never controlled his assets.
His manager did and to this day the Hutchence family are fighting over their real ownership.
When the Australian Government introduced their ‘bonk ban’ (go Barnaby, you little rabbit you), they also banned sitting MPs from holding assets in a ‘blind trust’ after former attorney-general Christian Porter quit cabinet in 2021, after accepting anonymous donations through a blind trust set up to pay his costs in legal action against the ABC.
Porter said he was unwilling to ask for, or publicly reveal, the identity of the donors to the trust and moved to the backbench and later resigned.
So who can you trust in a trust with trustees?
No one it would seem.
Moving on to the backdoor listing of Chemist Warehouse, it took everyone by surprise because of the sheer size of the deal and how everyone involved went about getting it (hopefully) through.
Hats off to all of the advisors involved, as they have taken something that was previously reserved for the dodgy mining companies in the 1999 ‘dot com’ era.
Even the Pharmacy Guild were taken aback and had to issue their own statement, which started out like this.
‘The Pharmacy Guild of Australia believes the apparent imminent takeover of Sigma Healthcare by Chemist Warehouse poses significant questions and risks.’ And on it went.
Even the ASX got in on the act and helped advise the players involved on how to go about turning a 100% owned shareholder company into 15% existing holders and 85% new Chemist Warehouse holders.
One thing the ASX advised was to issue a statement confirming all of the ins and outs of the deal to the market.
It was 165 pages long.
I think you will all agree with me in saying that from page 27 onwards, the report from Herbert Smith Freehills makes for fascinating reading.
The technical part of a backdoor listing is that if you were a mining company who raised funds for mining and then came in a few years later and said we are now going to backdoor in a software company, you still hold funds that were raised for another purpose.
That is the normal sticking point.
Sigma got around this by issuing that 165-page release to the market and then went around and raised $400m on the back of it.
By the way, their presentation that came with the fundraising cap in hand was 80 pages long.
Another 80 pages! You would need a fair amount of drugs to get through that without nodding off. Maybe that was their secret ploy?
Sigma shares took all of this news very well and it would appear that nothing leaked out to the market in the compiling of the report.
Again hats off to everyone involved, as keeping a 165-page report secret is no mean feat.
The old days of chatting up the secretary to the CEO, at the company’s local wine bar, just so you could glean some insider info, seem to be over.
And that’s it. No fun anymore.
When I joined my first UK broker in 1980, it was only made illegal to insider trade in 1978, so again I missed out on all the fun.
Before 1978 it was a free for all but obviously not for me.
Well, not the easy way anyway.
Nothing like the old days, where you would tickle up a stock, so it looked like a chart breakout was about to happen and have a few chartist mates point this fact out to all their followers.
This way, when the takeover did come and there was an enquiry, you could just point to the chart and say ‘this is why we were long, Your Honour’.
The poor chartists thought they were now God and could actually predict the future, when in fact it was all smoke and mirrors.
Maybe Jan just got the wrong advice from the wrong magician in the first place?
Who knows but by March 2024 the courts will name her punishment, and hopefully the judge starts his sentence (and her sentence) off with ‘Not happy Jan…’
The Black Prince Private Foundation was the name of the trust she used.
Well luv, it ain’t so private now!
Feel free to contact him with your best stock tips and ideas.