Get with ponz…

Those who remember “Happy Days” would of course remember The Fonz, the coolest dude around. For somebody who was supposed to be about 17 why did he always look to be aged about 30? Ah well, yankee crap.

I had an investment in Great Southern Limited. The timber planations company. That went bust.

NOW, it turns out according to todays Financial Review, ┬áthe company was telling a few porkies. They started paying out the proceeds of timber harvesting a few years back, and found the returns were not as good as claimed. So to keep the timber scheme investors happy, they “juiced up” the returns by boosting the payout to existing investors using the funds supplied by new investors.

This is what is known as a Ponzi Scheme, and it is as far as I know illegal.

The best known example is Bernie Madoff who MADE OFF with a few billion dollars in the US, and has just been jailed for about 160 light years.

One has to wonder: why did the Australian regulatory authorities not wise up to the local Ponzi Scheme being run by Great Southern and its management?

And why are they not currently being prosecuted?

These crooks should also be in prison.

In the meantime… I’ve just written out the official notification to serve on the wreckage, asking for my money back. I don’t expect to see it.

And I’ll do a post soon about how much the corporate vultures, otherwise known as Administrators, get paid. That’ll frighten ghosts and have children waking in the night screaming in terror.

I didn’t invest in a tax-driven timber scheme. Just a corporate bond. That actually makes me a creditor to them, not an investor. They owe me back my loan.

Here be a lesson: don’t invest in anything that derives its appeal and business model from a cunning tax planning arrangement. Shades of Baldrick: “I have a cunning plan, my lord”. Look how they always turned out.

2 Comments

Well the Timbercorp management has something to answer for as well . .and don’t get me started on the likes of Centro. The best financial advice you’ll ever get is ‘if it sounds too good to be true . .it probably is.’

Comment by Baino | July 4th, 2009 7:36 pm | Permalink

I’m sorry to hear that this didn’t work out for you. It’s always disappointing when things go pear shaped. I hate these Administrators. I worked for 4 years at a company that went belly up and no one in the company got their super because the Administrators did some jiggery pokery and people who had worked there for 10+ didn’t get a cracker.

P.S. Light year is a unit of distance, not time. Unless they are sending Madoff in a one way trip in a space capsule he isn’t going to get lightyears for his malfeasance.

Comment by Jack | July 6th, 2009 10:43 am | Permalink

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