Millions of dollars secretly lost by Airservices
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Air Ace,
Keep it going buddy - and Dick as well. If half of what has been alleged here is true then there are people who should be wearing striped clothing and looking over their shoulders in the showers.
Keep it going buddy - and Dick as well. If half of what has been alleged here is true then there are people who should be wearing striped clothing and looking over their shoulders in the showers.
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At the same time ASA has a corporation registered in Delaware, presumably to exploit corporation law for which that state is notorious.
Follow the money trail...
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These allegations need investigating by the Commonwealth Ombudsman who will only act after a written submission to do so. If someone... anyone, doesn't act, and the issue remains unresolved, Airservices can take the step of an "own motion" investigation in which terms of reference/ complaint, can be subtly inserted to reflect an answer they want.
Once the matter is under investigation AsA naturally remain silent. I am not sure if political intervention is allowed. A result could take a year or more.
It is better that an outside influence takes the matter up with The Commonwealth Ombudsman if only with an initial receipted complaint so that AsA are prevented from taking the step themselves.
Once the matter is under investigation AsA naturally remain silent. I am not sure if political intervention is allowed. A result could take a year or more.
It is better that an outside influence takes the matter up with The Commonwealth Ombudsman if only with an initial receipted complaint so that AsA are prevented from taking the step themselves.
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The "shareholders" are the people of Australians. The ASA subsidiary (which manages contracts in Hawaii) is registered in Delaware and has offices in Washington.
Delaware is notorious as a "state of convenience" for corporation registration.
Has ASA declared real financial losses or are there only the normal balance sheet provisions associated with loans?
If the US ASA subsidiary has incurred losses, the Minister for Transport owes an explanation to the people of Australia.
Delaware is notorious as a "state of convenience" for corporation registration.
Has ASA declared real financial losses or are there only the normal balance sheet provisions associated with loans?
If the US ASA subsidiary has incurred losses, the Minister for Transport owes an explanation to the people of Australia.
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If the Australian Taxpayer is supposed to subsidise a loss of an American venture; I say we need full and complete disclosure as to the amount and at what currency exchange rate this alledged fiasco is to be buried at!
What about just declaring a bankruptcy status in America and running like hell, like the Yanks do!
Dick, I was down at Port Macquarie the other day and the Hastings District Flying Club has a printed book of it's fifty year history. Very well put together and it recalls your input to making it a great place in Australian GA history. Pick up a copy next time you're up or have me send you one.
What about just declaring a bankruptcy status in America and running like hell, like the Yanks do!
Dick, I was down at Port Macquarie the other day and the Hastings District Flying Club has a printed book of it's fifty year history. Very well put together and it recalls your input to making it a great place in Australian GA history. Pick up a copy next time you're up or have me send you one.
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Airservices Australia 06/07 Annual Report financial notes:
s. Derivative financial instruments
Airservices Australia Group uses derivative financial instruments such as foreign currency contracts and interest rate swaps to hedge its risks associated with foreign currency and interest rate fluctuations......
Airservices used financial instruments provided by the American insurance giant A.I.G.’s London unit, known as A.I.G. Financial Products, or A.I.G.F.P.
A.I.G.F.P. specialise in intricate financial contracts known as credit derivatives, which insure debt holders against default, protecting clients from losses on debt or foreign currency and interest rate fluctuations. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.
When A.I.G.’s credit ratings were down graded on 15th Sept, from AA to A-, the need for more money increased beyond what it could borrow and it asked the US Federal Reserve for help. That help came the very next day with an $85 billion loan to A.I.G., offering it the chance to sell its assets in an orderly fashion and theoretically repay US taxpayers for their trouble.
This down grade in credit rating also triggered a clause in AsA’s contract with A.I.G.F.P. whereby AsA took on full liability for its exposure. This exposure was valued at US$300 million.
AsA senior management moved quickly to ameliorate this situation by seeking and receiving Australian Federal Government guarantees. These guarantees were finalised on or around 18th Sept.
By way of comparison, Goldman Sachs is estimated to have had $20 billion worth of risk tied to A.I.G., not accounting for collateral and hedges that Goldman deployed to reduce its risk.
s. Derivative financial instruments
Airservices Australia Group uses derivative financial instruments such as foreign currency contracts and interest rate swaps to hedge its risks associated with foreign currency and interest rate fluctuations......
Airservices used financial instruments provided by the American insurance giant A.I.G.’s London unit, known as A.I.G. Financial Products, or A.I.G.F.P.
A.I.G.F.P. specialise in intricate financial contracts known as credit derivatives, which insure debt holders against default, protecting clients from losses on debt or foreign currency and interest rate fluctuations. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.
When A.I.G.’s credit ratings were down graded on 15th Sept, from AA to A-, the need for more money increased beyond what it could borrow and it asked the US Federal Reserve for help. That help came the very next day with an $85 billion loan to A.I.G., offering it the chance to sell its assets in an orderly fashion and theoretically repay US taxpayers for their trouble.
This down grade in credit rating also triggered a clause in AsA’s contract with A.I.G.F.P. whereby AsA took on full liability for its exposure. This exposure was valued at US$300 million.
AsA senior management moved quickly to ameliorate this situation by seeking and receiving Australian Federal Government guarantees. These guarantees were finalised on or around 18th Sept.
By way of comparison, Goldman Sachs is estimated to have had $20 billion worth of risk tied to A.I.G., not accounting for collateral and hedges that Goldman deployed to reduce its risk.
Last edited by zoics88; 6th Oct 2008 at 02:11. Reason: clarification
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zoics.
What was the original transaction which initiated the $300 million liability? Was it purchase or lease of equipment or associated with ASA's US tower contracts?
What was the original transaction which initiated the $300 million liability? Was it purchase or lease of equipment or associated with ASA's US tower contracts?
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Ace,
still trying to find out full details...
as you may appreciate, this info is highly guarded as commercial in confidence!
will post as soon as known.
Z
still trying to find out full details...
as you may appreciate, this info is highly guarded as commercial in confidence!
will post as soon as known.
Z
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Governments should be exceedingly careful in the use of "commercial-in-confidence" provisions when it has 20 million share-holders with a right to know!
Is the deal really commercial-in-confidence, or is it a deal Government would prefer it's 20 million share holders did not know about?
Is the deal really commercial-in-confidence, or is it a deal Government would prefer it's 20 million share holders did not know about?
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Ever noticed how many N-reg bizjets are registered to crowds in Delaware? Not for no good reason...
Are you sure that they are not LIBERIAN registered BULK carriers?
Are you sure that they are not LIBERIAN registered BULK carriers?
Only caught a smidgen of 4 Corners last night ... but they seemed to be talking about some questionable transactions coming out of Delaware Corporations ... by some Australian organisations ...
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Only caught a smidgen of 4 Corners last night ... but they seemed to be talking about some questionable transactions coming out of Delaware Corporations ... by some Australian organisations ...
The Australian connection was via the Lowy family where they alleged Frank & sons have been involved in some creative transactions.
Delaware did get a fair mention and I gathered that that is where the Lowy's US companies are registered.
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ASAs annual report is due on the Ministers desk by no later than October 15, and then we have to wait for the Minister to table it in Parliament. I would think the Minister should have no reason not to table it quickly when Parliament sits.
It will be for the period 07/08 and will only be up to end of June.
It may take a question in Parliament to unearth the last few months going-ons.
It is worth reading the 02/03 report about the cross border transactions. A quote from there:
The corporation’s expertise and skill in innovative financial management was again
showcased during the reporting period. Airservices Australia received an international
award for commercial excellence for completion of a United States cross-border
lease. The lease realised gross revenue of $46.4 million with the benefits from
the transaction underpinning the corporation’s ability to insulate its customers
from higher charges.
Still unsure what dealings went on. But, I believe it was these dealings that led to Delaware Shelf Companies, and exposure to US$700+ million dollars.
What surprises me is that large corporations like BHP can get their annual reports out reasonably quickly, even though their activities are world-wide and involve different currencies , accounting procedures, legislations ,etc and employ a hell of a lot more people than ASA.
ASA have @3000 employees, the great majority of their staff are in Australia, and they have spent millions and millions of dollars on SAP, to ease their reporting. Yet it takes them over 3 months to generate an annual report. Are they writing it or inventing it?
The cynic in me leads me to suggest that they haven't got too much of an idea what they are doing, and use this breathing period to massage the books (especially in an EBA year with their staff) to work out how much they can downgrade profits , by committing to long term infrastructure etc. Then following cries of 'poor' in negotiations, ramp up profits for the next two years, reward those with their hands on the purse strings with large bonuses and move on to the next cycle.
It will be for the period 07/08 and will only be up to end of June.
It may take a question in Parliament to unearth the last few months going-ons.
It is worth reading the 02/03 report about the cross border transactions. A quote from there:
The corporation’s expertise and skill in innovative financial management was again
showcased during the reporting period. Airservices Australia received an international
award for commercial excellence for completion of a United States cross-border
lease. The lease realised gross revenue of $46.4 million with the benefits from
the transaction underpinning the corporation’s ability to insulate its customers
from higher charges.
Still unsure what dealings went on. But, I believe it was these dealings that led to Delaware Shelf Companies, and exposure to US$700+ million dollars.
What surprises me is that large corporations like BHP can get their annual reports out reasonably quickly, even though their activities are world-wide and involve different currencies , accounting procedures, legislations ,etc and employ a hell of a lot more people than ASA.
ASA have @3000 employees, the great majority of their staff are in Australia, and they have spent millions and millions of dollars on SAP, to ease their reporting. Yet it takes them over 3 months to generate an annual report. Are they writing it or inventing it?
The cynic in me leads me to suggest that they haven't got too much of an idea what they are doing, and use this breathing period to massage the books (especially in an EBA year with their staff) to work out how much they can downgrade profits , by committing to long term infrastructure etc. Then following cries of 'poor' in negotiations, ramp up profits for the next two years, reward those with their hands on the purse strings with large bonuses and move on to the next cycle.
Thread Starter
Does it tell the truth about how much of our industries money has been lost on GRAS- see the first post on this thread.
Does it hold anyone responsible?
Does it hold anyone responsible?