BPAM vs BFC, page-7

I received an email from Mr Flew their CFO in response to my questions , and it was as to be expected he answered the following way, I will quote his answers and comment on them

"The annual management fee paid by BFC to the investment management company, Beston Pacific Asset Management Pty Ltd, is 1.2% of the portfolio value of the BFC. The directors engaged independent valuers to assess the portfolio value on which the fee is then based.

It is correct to note that the implied portfolio value is significantly higher than the current market value of the company. Perhaps one way to interpret this is that the company is potentially significantly undervalued on market."

The first response we already know about, why the fee is paid on the asset value not the actual financial performance of the company, in particular its ability to make money, if the company continues as it has done to lose money the way it has , it is unlikely the company will survive yet BPAM are getting paid handsomely for their fantastic management of a company appearing to look like going broke, it actually seems corrupt as the previous poster wrote and the chairman of Bestons is actually the major beneficiary of BPAM, something smells rotten here.

As for the value we know the Market cap value is just over $40 million and the actual valuations believe the company to be worth $200 million. That's up for debate, remembering the cheese factory was purchased for $4 million, I wonder how the valuers, valued it, surely a large amount of that value would be based on return on equity which looking at the financials is upside down.


"It is also important to note that the management fee paid to BPAM is used to pay the salaries of a number of BFC executives, including the CEO and CFO. Accordingly, the fee is not in its entirety a gain to BPAM."

Interesting one this one, shouldn't Bestons employ and pay its own CFO and CEO it really doesn't seem right that those employees who pretty much are in charge of Beston global Foods are paid by a private company, which is majority owned by Roger Sexton, imagine the influence the CFO and CEO are under when they are being paid by Sexton himself, being the two biggest influences at Beston Global

We talk of governance and a company in control of its own destiny, when the two most important people in the organisation are paid by a private company owned by Sexton himself and he is the chairman of Beston Global.

With the influence that can be controlled by Sexton himself with such influence over the two most important players in the company, should Beston Global be a private company of Dr Sextons. It appears that is what it is, with this sort of structure and they are just using shareholders money wthout the correct governance to ensure the company is independant, makes you wonder why ASIC have not investigated such a company.