Company makes Worthless offer for shares By Eli Greenblat May 18 2002
The corporate regulators have given cautious approval to a plan by two Sydney businessmen to buy parcels of shares in collapsed, suspended and delisted companies from long-suffering shareholders.
A company called Worthless Pty Ltd has advertised to enable shareholders to crystallise losses on sharemarket disasters by transferring shares to Worthless for a net charge of $155.
Meanwhile, Insurance Australia Group chairman James Strong has warned shareholders of a proposal from a company called National Exchange Pty Ltd, which is offering to buy IAG shares for $2 each, or 40 per cent below yesterday's market price.
Mr Strong said National Exchange, which is run by West Melbourne businessman David Tweed, had made selective offers to shareholders to buy stock.
Mr Tweed, a veteran at making deeply discounted offers for stock, has also operated under the business name Country Estate & Agency Co.
Australian retail investors are estimated to be carrying hundreds of millions of dollars in sharemarket losses this year, following high-profile collapses of dot-coms, biotechs and agricultural businesses. Many are saddled with near worthless and unsaleable stock and have become targets for opportunists.
The Worthless website asks investors: "Have you invested in companies such as telco businesses, resources companies, agricultural or forestry companies, dot-coms, etc, and now consider the shares are worthless?"
A spokeswoman for the Australian Securities and Investments Commission said the scheme to buy the shares was ostensibly a legal financial service, as long as no financial advice was offered.
Worthless will pay $10 per transfer, regardless of the number of shares being traded, but will charge shareholders a processing fee of $165.
The attraction for sellers is that they can dispose of stock that normally would be unsaleable on the Australian Stock Exchange and then claim a capital loss against any equity gains during the year.
ASIC documents reveal that Worthless has two directors, Peter Hugh Fletcher and Mark St John Pierce.
Mr Fletcher and Mr Pierce were unavailable for comment.
