Monday, 14 July 2008

Tom's tax loss trading


CairnsBlog finance commentator Thersites, follows the woes of our own local Tomkat.



  • "Tom Hedley has added to his bank balance with a bit of trading in his Hedley and Gaming Property Fund last week.

    Tom was indirectly issued with 956,690 shares and on June 30 added one million of his already held shares in a sale that netted him just over $1.2 million.

    The trading has hardly put a dent in Tom's holding in HLG where he indirectly holds 76,338,032 shares.
    " - busy bits, Cairns Post

The ComPost gets the basics wrong again!

The 956,690 shares were issued to HLG Management back in January as payment for management fees. HLG Management is a private company of Tom Hedley which provides management services to the ASX listed HLG. What happened was that Tom did some FY end tax loss trading on June 30 to realise CGT tax losses while netting $616,894 in cash.

Tom sold those 956,690 shares to TWH, another of his own companies which also holds the rest of his HLG shares for his shares trust, in an off-market transaction. So he sold them to himself effectively. Tom then sold a million shares out of TWH at @61.7c also in an off-market transaction.

This is not going to net him $1.2 million in cash but it will net him some handy CGT tax losses.

The ComPost may have been confused because Tom stuffed up on a statutory form yet again and left incorrect details on the nature of the transaction unchanged from a previous submission on this new form. This was corrected in an announcement to ASX 6 days later, the day before ComPost publication.

Which leaves open the question of who was the buyer of 1 million HLG $616,894 in an off-market transaction. Perhaps a clue is that just a few days before Tom also got rid of his entire stake in CEC, also in an off-market transaction to businessman Ray Catalan. Tom would have also realised a big CGT loss on this just prior to FY end.

That Tom had ceased to be a substantial holder (5%) in CEC was announced to the ASX on 26 June, and on the same day Catalan announced that he had become a substantial holder for 5%.

Problem is that Tom's declaration isn't actually for the sale to Catalan in June, but rather that way back in April he sold 86,886 to move himself just below the 5% disclosure threshold, where you are required to reveal changes in holdings. This is a breach of the Corporations Act which requires disclosure of ceasing to be a substantial holder within two business days (page 65) not two months and more!

This is not an isolated circumstance for Hedley on similar disclosure. The form submitted to ASX on this was actually signed off by Hedley's CFO 'wunderkind' Scott Steve Donnelly who appears to make an art form of filing opaque flawed statutory documents.

Donnelly also did his own FY end CGT tax loss selling by flogging his family trust holding in HLG, where he is also a director, into his own super fund.

Note: this is all public information freely accessible through the ASX database for the listed entities.

11 comments:

Anonymous said...

You also appear to make an art of post flawed documents

There is no "Scott Donnelly" in Hedleys

I also see you appear to have no direct contact links, seems a bit weak to me.

Feel free to contact me
MJ
mark@kmjordan.com

Thersites said...

I apologise immensely, I had meant Steve Donnelly.

A trivial error and at least mine was not a statutory document filed more than 2 months late in breach of the Corporations Act.

Unlike yourself I can also at least post a literate sentence.

Anonymous said...

Seeing as you can't actually get the name of the CFO correct, I'm wondering how many other irregularities, mis-quotes, and down right mistakes have occurred in this article? Maybe it's only a trivial detail that's been gotten wrong, nothing serious, like the figures you've quoted...... you know - it's easy to get the simple stuff wrong. wait, is that backwards?

I'm not certain if (apart from a filing deadline breach), you're accusing Tom Hedley (or did you mean one of the specific companies involved in your broadside, you seem to be tarring them all with the same broad sweeps of your brush) of an financial illegality, or merely reporting on the EOFY scrabbling for tax minimisation that most companies partake in?

Dasherhalo. (I'm happy to post my identity when yours appears as a byline on your posts?).

Anonymous said...

Maybe I'm being hasty. I may have missed the nom de plume...... but can you blame me? Micheal Moore????????

Regards

Wayne/Dasherhalo

Thersites said...

Wayne/Dasherlo/MJ

As noted all information in this post is publicly available on the ASX website. If I have made errors you are welcome to point them out and I am happy to correct, as I have done above?

I did not claim that there was anything wrong or illegal with 'tax loss selling'. It was a damned fine year for this, one of the best ever, and Thersites did his own share.

What I attempted to illustrate was that the sycophantic, naive reporting of the Cairns Post makes it impossible for their readers to really know whats going on.

I would suggest on the issue of statutory breaches that those you are defending may not be grateful for your efforts as they pursue a small target strategy to. As stated in the post this is NOT an isolated incident and unreported in Cairns has been scathing commentary of the business practices of local identities by prominent commentators in both The Australian and The Sydney Morning Herald.

If your intention is to highlight this then bring it on .... heaps more to come ......

The Sopranos said...

Mr Moore-
You're well over your head trying to analyse complex financial transactions based on limited public documents. I know your intentions are to slime Tom Hedley and Roy Lavis, but you're on exceedingly thin ice, mate.

Thersites said...

Damn mate! Is it too much to wish for that a public company would just get its simple public disclosure documents correct? Forget the bullshit on complexity i've been around this block before!

Thersites said...

On belated reflection it has been pointed out to me that the full name of the Hedley CFO wunderkind is 'Stephen Scott Donnelly'. Consequently I withdraw my magnanimous apology above to MJ.

Scott(sic) made another amendment to a previously faulty ASX submission just this week ....

The Dish Pig said...

Thersites is to be complimented for his efforts in informing us of Tom's business activities and directing us to sites where we can do further research. I, for one, am finding it all very interesting.

Anonymous said...

HLG and all of it's intertwined interest have for many years been the School yard bully namly the person who calls ALL the shots being "the boss" Stephen Scott Donnelly, he and his henchmen have had blatant disregard for many organisations and individuals with his arrogance and money grab attitude, I fondly watch the failed ASX attempt and look forward to seeing a fire sale as most in the inner circle fully know exactly how debt ridden the HLG organisation really is.

They have always had the attitude they are above the rules and it is refreshing to see someone say it how it is.

Thersites said...

More news on Tom Hedley after yesterday's announcement from ANZ bank that they had ceased to be a substantial holder in HLG.

ANZ may have acquired legal title to the stake, which would appear to have been part of Tom's holding, as part of the Opes Prime fiasco back in March.

ANZ's statutory disclosures on substantial holdings would seem to now conflict with Tom's own disclosures.

We will try and update Cairnsblog on some of the curiosities emanating from Aumuller St over the weekend .......