ASX commanders fired their annual warning shots across the bows of the sharemarket's corporate cling-ons yesterday, telling 39 companies to either pay their listing fees or be tossed off the stock exchange.
The groups have seven days to lodge a bank cheque with the exchange or be delisted. Last year 75 per cent of those served with the notice paid up, but that still meant 13 companies were delisted.
All of the companies nominated yesterday were already suspended, but Insider would like to pay special tribute to three companies - Asian Pacific, Biron Apparel and Natural Fuel - which have now made it onto the list three years in a row, and so far lived to . . . well, not much really.
Asian Pacific was a website design company until its shares were suspended in early 2008. Not long before that, then chairman Barry Maranta had looked at helping to bail out former cricketer Craig McDermott's troubled businesses.
Asian Pacific was finally handed over to administrators, and promises of a revival have continued, the last at the end of March this year when the Takeovers Panel's favourite applicant, Darren Olney-Fraser, repeated the company's commitment to relist as soon as practicable and become National Health Ltd.
Olney-Fraser tried to raise $500,000 late in 2011 from a convertible note issue, but it was abandoned after failing to attract sufficient support.
Biron Apparel has been telling investors since last December that it plans to buy into Perth-based Terraflow, which it said had $5 million of business supplying water management services to the mining industry - including BHP's Pilbara operations. Updates reveal that Biron has raised $250,000 from issuing shares, and its last statement in June said it was closing in on finalising a notice of meeting and independent experts' report for the deal.
Natural Fuel has not been heard of since July last year when director Simon Lill announced that it was on the verge of buying into oil production in California.
Insider would also like to give a big welcome back to Viculus, which rejoined the list of non-fee paying companies after a break last year. Viculus has managed to make the list of dubious distinction four out of the past five years. Once a retirement village manager, it retired from that business when it went into administration in 2009.
Last year it managed to turn an accounting-rules inspired $16 million profit by having its debts forgiven as the shell was cleaned up for a proposed relisting as an investment company. That is not happening, either.
Finally, one of Insider's favourite listed companies, Zheng He Global Capital, is also facing delisting for not paying fees. As noted earlier this month, Zheng He has had only two directors, neither of them Australian residents, since July - which would seem to put it in breach of a whole lot more than not paying listing fees. Maybe those two are too busy trying to recover the $20 million that shareholders thought was the company's assets, but turned out to be claimed, and banked, by the Malaysian-based family that is Zheng He's largest shareholder.
That is a shame, because if it is delisted, shareholders may never hear about how the hunt for the money is going.
Directors take wing
QANTAS chairman Leigh Clifford and fellow non-executive directors must have breathed a sigh of relief when chief executive Alan Joyce yesterday stood by his commitment to getting the international business back on a profitable footing within three years.
That is not just because Clifford will have another bang-up annual meeting this year trying to convince shareholders that they should not mind the width of losses, but look at the quality of the business. Insider wonders whether Clifford and the other non-executive board members would also have had in mind that so long as Qantas retains an international operation, one of the best post-employment perks going around will still be available to them - annual free air travel.
Clifford gets four overseas jaunts and 12 domestic trips each year, which were valued at $25,000 in last year's annual report. Lesser directors get only half that allowance each year.
Insider figures that if a value has been put on the perks, then there must be a limit to where you fly, rather than an open-ended Phileas Fogg-style trip. Still, that works out to about $1500 a ticket - which tends to suggest, unsurprisingly, that the lanky Clifford ain't flying cattle class.
When you leave the board, though, it is a little like a politician's golden ticket - ex-directors of Qantas retain half that travel allowance annually, for a period equal to the number of years served.
In Clifford's case, for example, his five-year anniversary has just rolled around which means that even if he stood down at this year's annual meeting, he has 40 free tickets on Qantas' fleet to use - or about $62,500 of plane sailing.
imcilwraith@fairfaxmedia.com.au
Frequently Asked Questions about this Article…
What action did the ASX take against companies that hadn’t paid their listing fees?
The ASX issued formal delisting warnings to 39 suspended companies, giving each seven days to lodge a bank cheque for their outstanding listing fees or face removal from the exchange. Last year about 75% of companies served paid up, but 13 were still delisted.
How can an ASX delisting notice affect everyday shareholders?
A delisting notice can make shares illiquid and cut off regular public updates. If a company is removed from the ASX, shareholders may find it hard to trade their holdings or to get news about recoveries — the article notes concerns that delisting could mean shareholders never hear how disputes over assets (like the alleged $20 million in Zheng He) are resolved.
Which companies kept appearing on the ASX 'non-fee paying' list and why should investors pay attention?
The piece calls out Asian Pacific, Biron Apparel and Natural Fuel for making the list three years running, and Viculus for turning up four of the past five years. Repeated appearances often signal operational, governance or funding problems that can increase risk for shareholders.
What’s the current situation with Asian Pacific and its relisting attempts?
Asian Pacific — formerly a website design company — was suspended in early 2008, handed to administrators and has had multiple promises of revival. Takeovers Panel applicant Darren Olney-Fraser pledged to relist it as National Health Ltd, and a late-2011 attempt to raise $500,000 by convertible notes was abandoned after weak support.
What is Biron Apparel’s proposed deal with Terraflow and what funding has it raised?
Biron Apparel has said it plans to buy into Perth-based Terraflow, a water-management services supplier to the mining industry (including BHP’s Pilbara operations). Biron has raised $250,000 from issuing shares and in June reported it was close to finalising a notice of meeting and an independent experts’ report for the transaction.
What update is there on Natural Fuel’s plans to buy into oil production?
There has been no public update since July of the prior year, when director Simon Lill said Natural Fuel was on the verge of buying into oil production in California. The lack of further news can be a red flag for investors tracking the company.
What should investors know about Viculus’s past accounting treatment and relisting hopes?
Viculus — once a retirement-village manager that entered administration in 2009 — recorded an accounting-driven $16 million profit after its debts were forgiven during a clean-up aimed at relisting as an investment company. According to the article, that proposed relisting hasn’t occurred.
How do Qantas director travel perks work and why might that matter to shareholders?
Qantas chair Leigh Clifford receives four overseas and 12 domestic travel passes a year (valued at about $25,000 in the annual report); other non-executive directors get about half that. Retiring directors keep half the allowance annually for a number of years equal to their service. These perks are relevant to investors because they form part of director remuneration and reflect on governance and board incentives.
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