is there a glimmer of hope for afgha holders

The tex below is from SMH today,
Could there be a glimmer of hope for AFGHA holders?


Administrator questions Allco dealsScott Rochfort
March 12, 2009 - 2:40PM
More than $1.2 billion of "potential uncommercial'' transactions between the collapsed Allco Finance Group and its subsidiaries, joint venture partners and directors, including Gordon Fell and David Coe, have been identified by the financial engineer's administrator McGrathNicol.

McGrathNicol in a report to the company's creditors said it is also continuing to investigate whether there are "potential grounds'' to recover the $52 million in cash Allco Finance paid Mr Coe and Dr Fell, as part of its controversial cash and scrip takeover of the real estate asset manager Rubicon on December 19, 2007.

Read the full coverage of the administrator's report in tomorrow's Sydney Morning Herald.


Despite Allco Finance shareholders approving the purchase of Rubicon - which was 44.9% owned by Dr Fell and 19.9% owned by Mr Coe - the administrator in a report to creditors this week said the deal was one of several related party transactions "which could equally be characterised as uncommercial transactions''.

"Our investigations into this transaction, and whether there are potential grounds for commencing recovery proceedings, are ongoing,'' the administrator in its report sent to creditors this week.

The Rubicon deal was complete just one month before Allco Finance shares crashed as doubts surfaced over the company's viability.

The following month, Allco Finance's confirmed the market's worst fears when it revealed it had understated its current liabilities by $2 billion in its 2007 annual report and had to repay a $900 million loan within 90 days. From there it was all downhill.

McGrathNicol noted how the Australian Securities and Investments Commission had commenced an investigation into the "accuracy of certain financial disclosures made by the group in the FY07 financial statements''.

"Specifically, the administrators understand that ASIC is investigating the potential miscategorisation of current liabilities as non-current liabilities,'' it said

McGrathNicol has recommended that creditors appoint liquidators to Allco Finance at a creditors meeting scheduled for next week. It said the company had a $1.3 billion deficiency of current assets. The company was put into voluntary administration in November last year with more than $6 billion of liabilities.

The adminstrator listed $1.1 billion of "potential uncommercial'' loans made by several Allco subsidiaries. This included $249.2 million of loans to Rubicon and several other firms Allco had joint ventures with.

This included $44.8 million lent to the Hong Kong investment firm CITIC Pacific, which Allco formed a joint-venture with in late 2005.

The "potential uncommercial'' loans included $53.4 million lent to a firm called Cavallo, which Allco formed a joint venture with to build a transmission line in the US.

The administrator said it had the right to recover money or property from uncommercial transactions which occurred within two years of liquidation or four years if conducted with a related party.

SMH