Amazing Comeback Of A Quitter

Sydney Morning Herald

Saturday June 21, 2008

Scott Rochfort

The Liverpool-domiciled financial group Amazing Loans amazed its shareholders this week by announcing the comeback of its founder Paul Mathieson. It revealed that Mathieson, who quit as a director and chief executive barely three weeks ago, had been appointed as a "corporate adviser" to the group.

Buoyed by the decision of its lender of last resort, Fortress Credit Corp, not to cancel Amazing Loans's main $100 million credit facility, Mathieson argued that the company, which has seen its share price crash 90 per cent in the past year, is enjoying its best days ever.

"It's never been in better shape," Mathieson exclusively revealed to Reflux on Thursday, as shares in the group dipped another 0.1 of a cent.

"The business is fine. The [debt] review event has been completed, so the whole basis of your articles has been resolved. So there is no story," he said of the company that racked up a $5.2 million first-half loss.

"It looks funny you write all that rubbish when the financial [debt] review's finished and there's a technicality that's been resolved."

Mathieson declined to say how much he was being paid as a corporate adviser. But according to the group's annual report, it appears he was consulting while still chief executive. While he pocketed about $350,000 last financial year as chief executive, his consulting firm picked up an extra $300,000 in fees from Amazing Loans. A further $300,000 in consulting fees was paid by a firm Amazing Loans acquired in March, Investment Evolution Global.

Mathieson also revealed that Amazing shareholders - himself included - were more upset by this column's coverage than the company's dismal share-price performance.

"They're more upset about you," he said.

In response to Reflux's two previous articles on Amazing Loans' travails, the 33-year-old said: "It's so far from the truth, it's ridiculous.

"I think the media should talk about some positives and the over 100 jobs that have been created for Australia and all the other positives instead of just harking on the so-called negatives."

UNQUOTABLE QUOTES

The Amazing Loans founder also objected to this column quoting some of the philosophical comments he made on Ernst & Young's website, which awarded him a gong at its Entrepreneur of the Year awards last year.

"All that rubbish about taking quotes from Ernst & Young and all of that that was printed, that's not balanced journalism," he argued.

Mathieson also explained Amazing Loans had actually performed extremely well as an investment. "Since I founded the company the shares have gone up 13,000 per cent for initial seed capital," he explained.

Sadly, there seems no evidence of this in company's sharemarket performance. "[The shares] are down slightly at this stage, they have been up significantly higher," reasoned Mathieson.

The newly appointed Amazing Loans corporate adviser lashed out at continuing comments about the company being a pay-day lender or loan shark. He said the company's interest rates of 39.9 per cent were highly competitive. "We are the cheapest in our market segment in the country".

He also said he was unable to spell out all that he claims was wrong in previous Reflux columns.

"Certain other comments are incorrect that I can't comment on [and am] not in authority to."

In a fresh twist, Amazing Loans also changed the details of the planned demerger of its international arm Investment Evolution Global Holdings, which does not have any international operations.

For some reason, Amazing Loans will now sell the international rights to its brand name to IEG Holdings for $10 million, a whopping increase from the original price of $2 million set last month.

Strangely, it was only three months ago that Amazing Loans took over a company called Investment Evolution Global Ltd. A coincidence?

To fund the purchase of the Amazing Loans name, IEG plans to raise up to $20 million from investors as early as next month. The company failed to mention in its announcement that the demerged IEG Holdings will also be chaired and run by Mathieson.

SUNNY PROSPECT

The medical waste concern MediVac impressed corporate governance experts this week with its $2.8 million takeover proposal for the sanitary-wipe powerhouse SunnyWipes.

MediVac explained the "synergistic acquisition opportunity" would provide the loss-making company with a source of positive cash flow.

In an effort to show everything was above board, MediVac explained to the ASX that its main shareholder and director, Stephen Copulos, happened to have a "material but non-controlling" shareholding in the takeover target. It did not explain that Mr Copulos owns 35 per cent of SunnyWipes.

Coincidently, an "independent" MediVac director conducting due diligence on the acquisition, John Evans, stood down as SunnyWipes's company secretary a mere two days after MediVac said it had identified a "potential business opportunity" (aka SunnyWipes) in April.

MediVac's chairman, Paul McPherson, assured Reflux that due diligence was being run to the strictest corporate governance standards. "[Evans] is not doing it by himself."

Although the wipes are yet to go into full commercial production, McPherson said they would "provide strong regular income".

Since its backdoor listing on the ASX in 2003, MediVac has leased a whopping four of its MetaMizer needle-sterilising machines to hospitals in Australia.

TACTICAL STRIKE FOR GOVERNANCE

The corporate puppy dog has got white-collar villains quaking in their boots with its announcement it will allow superannuation funds to lodge their annual reports online.

In a sign the Australian Securities and Investments Commission wants to get tough, the regulator explained it was looking for ways to lift retail "investor engagement with their super savings and at the same time help super funds better communicate with their members".

"This means that super funds will be able to put their annual reports on a website as a default (consistent with companies), but only where they give each super fund member information about longer-term returns in their personal member benefit statement," it said.

Reassuring to see ASIC is properly deploying all its resources at a time when Australia faces numerous corporate collapses.

© 2008 Sydney Morning Herald

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