Ann: Response to Bonitas Research report, page-101

@Dshare50 - I also have the full report now. I have decided to look into the allegations in some detail and the RFF reply is handy in that regard as it cross references everything quite nicely.
It is quite involved as there are multiple documents to look at but I think I have spotted an error in the Bonitas logic which asserts that RFF had included A$28+ million of fabricated rental income.
Here is the logic for anyone who wants to follow along: (unless otherwise stated I'm refering to the Bonitas document)
On P9 a table is derived which shows the rental revenue which must have been received from SHV with 2017 amount being $8.730 M
On P10 an extract from SHV annual report purports to show that their Operating Lease Minimum Lease payments dropped from $5.169M to $3.225M. Elsewhere (and easily found in the same SHV report) they indicate that they have 2 types of leases being an Operating lease and a Finance lease with a criterion to decide which classification is appropriate in each circumstance. They also have the following table

Which clearly shows that the minimum lease payments for Almond Orchard Leases would be $16.9M in FY17.
I also note that these are all minimum's so I guess they could be higher.
So now should we believe the assertion that the $3.225M was what SHV paid for Almond orchard leases in 2017?
SHV identify that they lease almond orchards from 3 parties, namely
1) Arrow funds management (1514 acres)
2) RFF (3017 acres)
3) First State Super (2458 acres plus 3992 acres being developed)
Bonitas also identify that Arrow Funds received $2.885M in rental income in 2017 from SHV (table on p11)
So by their logic they arrive at the conclusion that the maximum rental amount paid by SHV to RFF in 2017 is $373K.
In fact this is the amount that would apply for both RFF and First State Super. I.e. the bulk of SHV rental (90%) is going to Arrow despite the fact that they are the lessors of only 22% of the almond orchards. In fact this is where Bonitas argument falls down and they are being disingenuous. They added a comment at the bottom of P10 - "SHV added a third operating leaseexpense owed to a third party via a sale & leaseback SHV entered with First State Super in 2016, suggesting that our estimate for the amount rentalexpenses SHV paid to RFF may be overstated".
I think the reason First State Super is dealt with in this throw away way is that if they were to account for it correctly, it would imply by their logic that RFF was paying SHV to lease their property!
I don't think Bonitas could have accidentally overlooked this, looks more like manipulation of the facts to support their case.
After this I am now firmly of the view that RFF is in the clear. I hope the regulator can sort it out quickly as I think Bonitas will have a case to answer.
As always DYOR and GLTAH