Monday, 05 April 2010
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The Root Cause of Listing FEA on the SPSE
We have gone through very interesting times in Fiji and we have witnessed the ingenuity of shadowy advisors and consultants that know how to pull the wool over our peoples eyes.
We were of course to use the oft cited coup 4.5 phrase “the first to break the news” that the Military led Government of Fiji would ostensibly divest their interests in certain public enterprizes including FEA which would eventually see it listed on our securities exchange.
The listing of FEA will not (contrary to what they will say and have said in the past) stimulate our domestic market. It is a historical fact, you just have to look at the trading history of ATHL on the SPSE, institutional buyers DO NOT as a matter of practice trade on market information, on a frequent daily basis (hence the illiquid dormant SPSE bleeding to death in irrelevance), only those mom and pop ones that TRY to invest and that comprise of less than 1% of our population and even then 75% of this 1% use their FNPF through its nominee company.
Institutional Investors such as FNPF agree to purchase a large chunk PRIOR to the public listing at a heavily discounted price which is almost always less than 50% of the listing price. The crux of the matter is that when the FEA is finally listed it is the normal ordinary 1% mom and pop that pays the overly inflated listing price thinking that this ‘investment’ will save them when they hit retirement age. It is exactly these mom and pop retail investors that the CMDA Regime were installed to protect from such manipulation, but that is water under the bridge.
So if FNPF buys FEA Class A Ordinary Shares at say $0.50 prior to listing via the private placement and the FEA is subsequently listed on the SPSE (and whether the transaction is executed off market or on market to pay for the CEO’s Salary and Chairman’s sitting allowance) with an opening price of say $1.50, the point that the ordinary mom and pop decides to take their money out of the biscuit tin from the cabbage farm and instruct their broker to buy FEA at $1.50, that is the crystallization event wherein the mismanagement, fraud, misappropriation and illegal unsustainable ‘investment’ in our public sector securities with the RBF and the absence of FNPF Annual Accounts for 3 Years will “DISAPEARED”.
How? When the FNPF Board Management and Trustees STEAL $100,000,000.00 from the PEOPLE, they have to replace it, this magic act is called the PRESTIGE. It follows therefore that when the FNPF agree to buy 50,000,000 ordinary shares in FEA for $0.50 they will pay $25,000,000.
When the FEA gets listed on the SPSE and the cabbage farmer buys FEA at $1.50 the $25,000,000 FNPF shareholding is now worth $75,000,000. They have just printed $50,000,000 in one day folks!
But that’s not all folks when the iron is hot and the public hysteria is overwhelming with all the Suva journos at the SPSE interviewing the likes of Hari as to how this second landmark listing will stimulate the domestic markets and shows confidence in the corporate governance of our public institutions as well as its future profitability in renewable energy, they will strike it again within a week and ‘manipulate’ the share price again to stabilize at around $2.50 and call it a day until of course the next financial period comes around.
Now if you were following, the 50,000,000 ordinary shares initially purchased by FNPF at $0.50 totalling $25,000,000 will now be worth $125,000,000.
They have just replaced the $100,000,000.00 moneys “LENT” to RBF and they can then sell off 10,000,000 shares at the strike price of $2.50 to say FHL and UTOF and get their initial investment of $25,000,000 back. And if you do this simultaneously within the settlement time frame you can walk into the SPSE with DOGS BALLS and walk out with $100,000,000.00 and publish your Annual Reports for the first period of malfeasance.
Oh I love this country.
NOT FORGETTING as a bonus the FEA will convert their DEBT with the CHINESE into EQUITY which is the secondary aim of this exercise.
And then of course you move on to the NEXT public enterprize and repeat the process and when all government assets are sold you call for elections so that the legitimate democratically elected government can go to veiuto and bite their fingernails.
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