ASIC has intervened to knock off
one of stockmarket scumbag David Tweed’s schemes, but his main amoral
game continues at considerable cost not only to unsophisticated
shareholders, but to major companies as well.

Yesterday ASIC stepped in to block
Tweed’s ridiculous takeover bid for Clime Capital. ASIC deputy chairman
Jeremy Cooper said Tweed’s purported bid was a “a fundamentally
abhorrent” way of structuring a takeover. “We likened the bid to a
virus that we did not want to let loose on our markets,” he said.

You
could apply the same “fundamentally abhorrent” and “virus” descriptions
to Tweed’s ongoing legal-but-unethical main game of buying shares from
unsophisticated investors for much less than they are worth – a racket
that has made him millions. It’s also costing major public companies
millions as they try to protect their shareholders from his dodgy
dealings.

AMP, for example, has been under attack by Tweed since
he legally obtained a copy of the company’s share register in January.
Tweed has directly approached AMP shareholders offering $5 a share when
the stock has been trading at around $8 to $9.

It’s a patently
ridiculous offer – but by AMP’s nature of being a former mutual with
some unsophisticated shareholders, it works. I hear some 1,200 AMP
shareholders have fallen for this scam, parting with about 390,000
shares, giving Tweed a profit of about $1.5 million.

More
recently, the grub has tried a variation on his theme by offering $13
an AMP share, but paid over 20 years in lots of 65 cents. Applying a
standard discounted cash flow, and the real value of the offer is about
$6. For plenty of small shareholders who don’t know any better though,
that $13 might look attractive.

AMP – like IAG and others before
it – has tried to warn its shareholders about the racket. It’s written
to all 880,000 of them twice and tried putting out releases through the
ASX as well. The postage and stationery must be worth a million
dollars, never mind executive time dealing with it and trying to find a
better solution.

Part of that better solution for AMP is
establishing a small shareholder sale facility to buy shares at a fair
market price from the sort of shareholders Tweed targets.

What
sort of lawyers and accountants are happy to work for Tweed, to take
his ill-gotten (but legal) money and facilitate his scams? I don’t know
– but I wouldn’t want to share space with them.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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