blood boils reading this

Tcard debacle leads to $33m cash return for salvager
COLIN KRUGER
July 7, 2010
THE Tcard never delivered for NSW commuters but it has proved to be just the ticket for Duncan Saville, the businessman who salvaged the company behind it.
As the NSW government battles in court with the corporate shell of Tcard contractor ERG, Mr Saville is receiving a $33 million cash return from the business operations he acquired from ERG last year.
In a sign of how much things have turned around since Mr Saville's acquisition, Vix ERG - the company he set up to house the ERG business - was proposing to hand out $33.32 million in cash via a return of capital on preference shares owned by other Saville entities.
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The payment was due to be made last week. Vix ERG executives were not available to comment.
ERG, now called Videlli, was facing collapse in 2008 after the state government terminated the Tcard contract and triggered an $89 million loss that even ERG - which has now accumulated $732 million in losses - could no longer afford.
Mr Saville's fellow ERG shareholders agreed to a deal late in 2008 which handed him the core business in return for the forgiveness of $114 million he had lent to the company. The business was handed to Mr Saville in March last year.
The turnaround came quickly, with Vix ERG reporting a $23.1 million net profit for the financial year.
The result was driven by a $33 million gain from acquiring the ERG business below book value and selling off parts of the business.
The agency responsible for overseeing the Tcard contract is suing ERG/Videlli for $77 million, which in turn is suing the government for $215 million over the termination of the Tcard contract. Mr Saville is funding ERG/Videlli's legal costs.
The payout to Vix ERG's preference shareholders offers hope for ERG's original investors, who have a ''residual interest'' in the business.
ERG/Videlli owns one of two ordinary shares in Vix ERG.
But Mr Saville - who owns the other ordinary share - has control of the company through 115 million preference shares issued to him. They rank above ordinary shareholders' interests.
According to the explanatory memorandum issued to ERG shareholders in 2008, while the preference shares remain issued Mr Saville gets to appoint all directors to the board of Vix ERG.
According to the documents, Mr Saville even got to vote ERG/Videlli's ordinary share in favour of the $33 million capital reduction via an ''irrevocable power of attorney'' which can be used in relation to a share buyback or capital reduction.
As a step towards redeeming the preference shares, the capital return could give ERG/Videlli shareholders some hope of regaining an interest in the business they were forced to give up in 2008 under threat of insolvency.

Source: The Sydney Morning Herald

I don't believe that ERG shareholders voted to transfer ERG assets to VIX. Mr Saville owned the majority of shares,at the time of voting, thats why the resolution has been approved.
Mr Saville watch your back, sooner or later you will pay for stealing from us- ERG shareholders