By Anneli Knight December 3, 2005 Market predator … David Tweed.
Market predator … David Tweed. Photo: Paul Harris AdvertisementAdvertisement
SHAREMARKET predator David Tweed has launched his most audacious attack on Insurance Australia Group shareholders, his third scam in four months.
Under his latest company reincarnation, Direct Share Purchasing Corporation, Mr Tweed sent a letter containing an offer of $3 a share for shares worth $5.34 early this week.
It is not yet clear whether all of IAG's 700,000 small investors received the latest letter and whether any have accepted it. But the company estimated that about 20 investors had taken up Mr Tweed's August offer of $8.10 paid out over 18 annual instalments of 45c, and approximately 160 shareholders accepted his September offer for $3.50 a share.
IAG has sent out a series of letters to shareholders warning them not to accept the unsolicited and undervalued offers. A spokeswoman said the company would not send a letter warning against the latest offer but it would update the warnings on its website.
"Here we go again," said IAG shareholder Barry Flanagan, who this week received his third letter from a Tweed-run company. "He's preying on the elderly and people who have no idea about the sharemarket. Some people might not even know how to sell shares.
"Someone will accept because of ignorance, that is the tragedy of all this stuff."
Complying with a recent Federal Court decision against Mr Tweed, the offer sets out the market price of one IAG share, the number of shares the investor holds, the market value of the shareholder's parcel of shares and the price DSPC is offering for the share parcel. For example, a shareholder who holds 1000 shares would be informed the shares are worth $5340 and that DSPC would pay $3000 for them.
Once a shareholder signs the form, a power of attorney is given to Mr Tweed which states: "The power of attorney is irrevocable and is granted to protect the proprietary interest of DSPC in the shares."
Mr Flanagan said: "Every time he gets someone to sign the letter he makes 50 per cent on the deal. For the cost of a postage stamp, you mail out 15,000 of these - you only need a couple to say yes and you've made a lot of money for no effort."
It is Mr Tweed's fifth unsolicited offer on IAG in three years.
He has also targeted Axa Asia Pacific, AMP and Tower. Each of these companies has on its registry some inexperienced investors who received shares in a demutualisation.
IAG Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
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