David Tweed and share scams

Does anyone have any direct experience of David Tweed's (National Exchange Pty Ltd) stock dealings? A Google search turns up plenty about his practice of trying to buy small shareholding off-market at below market prices and his failure to enforce the purchases through the courts. He sounds like a plausible scamster, and it's pretty clear that ASIC have a large eye on him.

I'm interested in direct experience because he's taking an interest in an LIC called Clime, which I hold. It IPO'd February 2004 with a large number of small shareholders. Tweed starting buying in about November 2004 and now has a bit over 8%, which puts him among the largest shareholders. He requisitioned an EGM in June, which he didn't attend, to try and get himself voted onto the board. That was comprehensively defeated (75% of the total register against!), but on Friday the company announced that he's requisitioned another EGM to try and get some changes to the constitution.

As far as I can see this is a new tactic in the Tweed kit. I'm wondering if anyone has seen him, or anyone else, do something similar and has ideas about what might be coming next.

Thanks

Ghoti

Hey Ghoti

Don't know whether or not this is related but my Mum owns some small share holdings in a couple of blue chip and mid range companies. We've recently been discussing charts and trading and comparing strategies which has been very good for both of us.

Over the last few months Mum has been recieving mail from a company offering to buy her share holdings at usually a 10% discount. Her questions to me is why would anyone in their right mind sell their shares for less than their current value to someone who sends them a letter out of the blue. Even if you needed quick cash you would be able to liquidate your shares for a higher value by selling them back to the market. My only answer was that this company was trying to take advantage of potential ignorance a person may have regarding the value of their shares. If it didn't work why would they continue to send these letters every month? Needless to say we wouldn't sell to this company ever.

I have yet to see any of these letters as we mainly communicate via email or phone but I will be interested to see which companies they are.

I am interested though in how her address details and share holdings can be found out. I thought this information was convered in the privacy act but I may be completely wrong.

Thoughts?

Cheers

Mick

If the letter includes a reply-paid envelope, tell her to keep sending it back empty, so at least these leeches will be charged for the extra postage

Maybe include a photocopied bum as well?!

Very good idea!!

Keebab. This guy Tweed has been around for years, and as you say , try's to purchase shares from the gullible (at way below mkt price).

Mostly these people have recieved shares from a co going public ie amp. awb . etc ( cant think of the word for it )..
Ive had plenty of friends who know I invest and trade the mkt, asking me what to do when it turns up in the mail...
My answer same as Mofra ( gday mof ). But with Lots of rude words included :swear:

And from memory didnt he take cba to court because they wouldnt provide a listing of shareholders ( available to the general public ,, by law ).. I think the bank did provide the list but in an unreadable form on a CD....He spat it... But i think the the courts threw the charge out...
Someone else may remember the story better..

Mofra said:

If the letter includes a reply-paid envelope, tell her to keep sending it back empty, so at least these leeches will be charged for the extra postage

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Isn't reply paid charged by weight, if so why not send back a brick or something heavy?

He tried to get a hold of the CBA share register but CBA had electronic register he couldn't copy to his mailing program.
He threatened to take it to court but backed down fearing the courts would outlaw the process he was using.

Most of the targets have been from privatisations and demutualisations.

Funny the guy is apparently a major cheapskate according to his family, doesn't drive a car but rides a bike

Thanks guys.

Keebab, I can't find anything about Tweed offers at a 10% discount, although I admit I didn't do the arithmetic on everything I looked at. In one case he offered 35c very shortly before an IPO that floated at over $1.50. In another he offered $2 when the price was $1.93, but his offer price was payable over 15 years. I think most of his early offers were considerably more than 10% below market - I saw one newspaper report that he intended to offer $15 for CBA when it was $23.

Funny you talk about your Mum. My Mum actually sold a small parcel of BHP shares to a buyer through an unsolicited off-market trade, but that was in about 1992 (i.e. pre-Web) and the offer was expressed as market price on a particular date. The advantage to her was no brokerage and simplifying her affairs. The advantage to him was building a reasonable parcel. He was a retired private investor, and I've never heard anything to suggest he wasn't on the level.

Companies are obliged to disclose the shareholder register - it's a public document. So there's nothing funny about that, and there's nothing necessarily shonky about unsolicited offers, even at low prices. Tweed, and others like him, just takes it to unconscionable extremes.

Rockon mentioned that CBA gave Tweed their share register in format he didn't like:

Instead of a list of about 726,000 shareholder names in alphabetical order, ASX Perpetual had sent Mr Tweed a CD-ROM with 14,818 files in a form that could not be manipulated, nor copied and pasted into a Microsoft Excel spreadsheet. (SMH, 3 Dec 2004)

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He took them to court, claiming that they were obliged to provide the register in a form appropriate to the use he wanted to make of it and claiming he could have made between $2 and $80million if they had done so, but he dropped the case before it went to judgement
http://www.theage.com.au/news/Business/Tweed-walks-away-from-CBA-case/2004/12/08/1102182361695.html

Nothing he's done to date has been shown to be illegal, which I guess might be one reason he's been ready to use the courts against those with less knowledge, advice and resources. Here's a bit of a summary of Tweed's career and methods.
http://www.theage.com.au/news/Business/Tweed-feeds-on-the-vulnerable/2004/12/10/1102625532104.html

You can read some of the Federal Court judgements in Tweed cases on the Web. I laughed at one, which included copies of 2 offers he made to OneSteel shareholders - the copy had "In Your Dreams" written across it in large letters.

What I can't find is anything that would help me understand what he's now doing with Clime. Well in a way it's obvious what he's doing - he's trying to get control of a lot of cash - but I don't know enough to predict the stages. The company announcement last Friday said they are seeking legal advice - I guess I'll just wait for them to say what it is.

Cheers,

Ghoti

bvbfan said:

Funny the guy is apparently a major cheapskate according to his family, doesn't drive a car but rides a bike

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Yeah; from one viewpoint he's a model of how to build wealth. It's just that the bit about how to be human as well as wealthy got left out.

Ghoti

Thanks bvbfan... "Demutualisation"... Thats the word I was looking for.. :

Nice rundown on Tweed ghotib.... And as you say, he is above the law. Its just I and presume others dont like his business ethics..

Not a nice way to make your mark on Earth for this once only trip.

Errr... I wouldn't say he's above the law. He's under it, and his actions have been within it. He himself said, according to yet another newspaper report, that he didn't learn morals at school", but plenty of immoral behaviour is within the law.

Cheers,

Ghoti

Hi. Ghotib. Tweed has been around a long time. You can be sure if he offers you a certain price, double that price to find a true value. Don't do anything at all, you may find other offers in the pipeline. By the way,hope your voice is holding out this Winter, I'm doing well.
Regards Kooka.

Anthony Hosemans said:

Hi. Ghotib. Tweed has been around a long time. You can be sure if he offers you a certain price, double that price to find a true value. Don't do anything at all, you may find other offers in the pipeline. By the way,hope your voice is holding out this Winter, I'm doing well.
Regards Kooka.

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Thanks Kooka. I think he'll probably drop the low bid tactic because of the disclosure requirements implemented in legislation in 2004. He did send an offer to Clime shareholders, but it was pretty close to market price and didn't seem to have anything peculiar about it. As a company though, Clime is not like the big, demutualised companies I've read about, and I don't see why he would expect its shareholders to behave as theirs did. He's made one concerted attempt to buy shares off-market, and he's now a substantial shareholder though not necessarily through off-market purchases. He's made one tilt at the board, and is now trying to get the constitution amended, I think so he can have another go at the board. The vote on his previous attempt suggests that he'll have trouble winning, but his activities aren't costing him anything and they have nuisance value.

Glad your voice has held up. I was fine till last week. Right now my voice sounds like a crow on a bad day, and when I breathe I creak like the gate it's sitting on. But this too will pass.

Cheers,

Ghoti