The failure of stockbroking firm Tricom to settle some trades from last week has raised plenty of questions about its relationship with the MFS, Allco and Babcock crowds and its $2 billion plus in loans from the likes of ANZ and Merrill Lynch.
Crikey was the first to warn of trouble when the following appeared in a piece last Friday:
Then you’ve got Babcock’s house broker Tricom, the big margin lenders who are also said to be feeling some pain.
Tricom has been particularly ubiquitous when it comes to Babcock & Brown’s funds and takeover activity in recent years.
When Babcock was battling with Macquarie Bank last year to win control of Alinta, both Tricom and Babcock itself appeared on the register at strategic times.
Then there was the episode with wealthy retired Sydney doctor Joe Ross regularly popping up on share registers such as MTM Entertainment, Primelife, Ausdoc and Commander Communications at the same time as Babcock was making a play.
The Australian’s Michael West, who has just been poached by Fairfax, reported that Tricom was usually the broker of choice and even margin called Babcock at one point on the Primelife shares it bought from its very colourful founder Ted Sent.
Tricom, at the behest of its bankers, has also been busily margin calling some of the MFS directors and Allco principals over the past weeks. This is interesting because it used to be Babcock & Brown itself that funded the MFS founders, Phil Adams and Michael King, until a couple of years back.
In another interesting connection, MFS was last week forced to sell its 23 million shares in Babcock & Brown Communities, the re-badged Primelife, at the knockdown price of 58c last week.
The Tricom website reveals nothing of its problems today, despite suggestions from founder Lance Rosenberg in today’s papers that all “administrative issues” would be sorted by the morning.
Meanwhile, The Australian’s Bryan Frith has once again attempted to unravel the Allco web today and leaves the strong impression that he believes David Coe’s crew failed to meet its obligations for timely disclosure of the troubles.
The fact that Tricom crossed most of the big Allco lines last week would suggest that its bankers were in the thick of the action as well.
The big question is whether Tricom has any ongoing loans to these Allco principals whose shareholdings in Allco Finance Group were laid out as follows in the 2006-07 annual report:
- Allco Principal Investments: 175 million shares
- David Coe, executive chairman: 21.25 million shares
- David Veal, head of aviation: 11.35 million shares
- Nick Bain, head of infrastructure: 11.75 million shares
- Chris West, co-head of corporate finance: 10.43 million shares
- Rob Moran, co-head of corporate finance: 3.43 million shares
- John Love, head of shipping: 2.75 million shares
- Mark Worrall, head of rail: 4.17 million shares
- Justin Lewis, head of strategy: 1.04 million shares
This Mayne Report video points out the incidental connection that Babcock & Brown Communities created last year with Max Green, the brother of Babcock CEO Phil Green who was murdered in Cambodia after pulling off a major fraud on some wealthy Melbourne investors.
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