Aero Inventory Share Discussion Threads

[vulgaris] 10/12/2009 14:02

@Measureguy above, from Sunday Times.........'Porsche Racing Team, which received £200,000 in corporate hospitality fees from Aero between 2004 and 2007'

Why on earth was this company sponsoring motor racing? Sponsoring sport is a way of impressing individual punters by projecting image (e.g. ............drink Gatorade & hit your balls like Tiger Woods.......) but what possible role does it have when your customers are a few big airlines?

[tday] 09/12/2009 10:21

I received an utterly useless reply from the AIM Team but, only after I had to chase them up. Marcus Stuttard didn't have the courtesy to reply himself.

Mulling over the next step.

[ed the business] 08/12/2009 22:58

Permission to fart in Rupert's direction, Harry lol

[hvs] 07/12/2009 13:06

Directors, auditors and the brokers and advisers are all frokm the SAME STABLE.

GRAB the fees , make it last as long as you can and then

SCREW THE SHAREHOLDERS.

Was Ruper Lewin RACING or FLYING ? Doing both I suppose apart from being at the JOB.

a CLASSIC MADE IN THE CITY STITCH UP.

Ah well Its ONLY OTHER PEOPLES MONEY.

[evaluate] 07/12/2009 12:50

MDJ8,

I absolutely agree.

Directors & auditors have to be made to pay for this.

WTF have Deloittes been doing?

[mdj8] 07/12/2009 12:24

My wish is to see the directors in jail and any assets earned after they started falsifying things, seized by the liquidators for offset. At that point Deloitte would be made to make up any further shortfall to ensure no one, including shareholders is left out of pocket. I'll keep dreaming....

[hvs] 07/12/2009 09:59

The Bowler hattted blue suits surely look after each other.

New Labour with its INCOMPETENT team at The TREASURY have made sure they get away SCOTT FREE.

All asleep at their desks with six figure salaries to boot. And a BONUS for
snoring at the desk.

Welcome to SOCIALIST England sic CAPITALIST "New" LABOUR.

[masurenguy] 06/12/2009 15:10

It's clearly all over at AI. Commiserations to shareholders !

Fraud probe into Aero's collapse

The Serious Fraud Office has been asked to investigate the collapse of Aero Inventory, the airline parts supplier. The board of Aero wants the SFO to examine whether there is a case to answer after a black hole emerged in its accounts, which pushed the company into administration last month. The move is a blow for Rupert Lewin, the former chief executive who founded Aero in 1994. He resigned from the company, along with Hugh Bevan, his finance director, after the group's shares were suspended.

In addition to building Aero, Lewin also set up Porsche Racing Team, which received £200,000 in corporate hospitality fees from Aero between 2004 and 2007. Sarah Bennett-Baggs, the racing driver and TV personality, was installed as his team manager. Aero, which was listed on AIM, was worth £140m when its shares were suspended in late October after it found accounting mistakes in a Canadian contract. It insisted at the time that "the issues raised are not believed to be a result of either fraud or theft". Shareholders, including Gartmore and HSBC, are unlikely to receive anything, said KPMG, the administrator.

Last year the business had sales of £440m, but it ran out of cash and was unable to secure the support of its banks to lend an additional £50m. Investors are furious with Deloitte, the auditor, and JP Morgan Cazenove, the broker. Norman Yarrow of NVM Private Equity said: "I find it amazing that these guys were taking out such huge fees and the shareholder is stuffed."

[redips2] 06/12/2009 14:01

sunday times 6.12.09 it,s over, forget it, expect zero

[randolph and mortimer] 02/12/2009 20:55

The trouble is, hardly anyone ever goes down for this behaviour. The last person to get done was the chief of Versailles PLC.

[greengiant] 27/11/2009 07:08

Sorry for your guys loss here. If you want to complain about Deloittes performance then ICAEW is linked here.

You can also bring a complaint against the FD and request that he is struck off the list of members is it shows here acted dishonestly



gg

[dawsonpaul] 27/11/2009 04:17

Anyone ever seen Ruperts house? You can see it from google earth and it dwarfs everything around it. It is (I am not joking) a castle.

[evaluate] 26/11/2009 10:43

raginghippo,

IACW is the body to investigate Deloitt's role in this.

I expected your response from the FSA - but feel that AIM really should get involved.

[raginghippo] 26/11/2009 09:32

good work...however, i feel this is one of those cases that we will slowely accept and forget about while the directors continue to polish their Rollers with fresh russian virgins. The regulators, like all public sector workers, first look to see if they can offload the problem to someone else and in this culture we, i fear, are p1ss1ing in the wind.

[mdj8] 26/11/2009 01:52

Thanks Kramch

[sleveen] 25/11/2009 18:12

nice one kramch

[kramch] 25/11/2009 16:26

I have now had a reply to my letter to the Head of AIM, and permission to reproduce the text here;

"Thank you for your email regarding Aero Inventory plc. Private investors are a vital source of capital and liquidity for companies admitted to AIM and the Main Market and I would like to assure you that we take investor protection, the disclosure of information and the monitoring and enforcement of the AIM rules very seriously.

The circumstances surrounding Aero Inventory and the series of events that have led to their suspension are specific to the company rather than indicating a systemic or wider issue with the AIM Rules.

In summary:
• Stock discrepancies have been identified, resulting in banks withdrawing funding
• The position of certain company directors have been reviewed by the company and they have been removed from their posts
• Reviews are being carried out by the banks and the company regarding the stock discrepancies - these reviews are now under the control of the administrator
• We understand the matter has been referred to the relevant authorities beyond AIM Regulation that have regulatory oversight and the relevant powers of investigation
Unfortunately I am unable to provide specific details of any investigations being carried out by either AIM Regulation or other regulatory authorities but can assure you that we are taking this issue seriously and will continue to monitor and coordinate our activities with those of any other regulatory authorities as appropriate.

The Exchange takes robust action against companies where breaches of the AIM rules are identified. Recent examples are the public censure and fine of Regal Petroleum on 17 November and the censure of Environmental Recycling Technologies on 23rd November.

Despite the extraordinarily difficult global economic conditions that have affected financial markets globally this year, AIM has continued to perform resiliently and I am confident that the regulatory framework that we have developed over the past 14 years continues to effectively balance the needs of smaller growing companies and their investors

We are deeply concerned about this matter and I hope this email gives you confidence that appropriate steps are being taken."

and an excerpt of my reply;

Thank you for your reply acknowledging your deep concern over this sudden debacle.

It is somewhat reassuring to know that authorities beyond AIM have been notified, and that your and other investigations are commencing.

We look forward to announcements on the subject and scope of these investigations by the relevant authorities at the earliest possible dates. (K)

[evaluate] 25/11/2009 16:00

Raginghippo,

Worth copying the IACW in as well.

I think they are the people who decide whether the auditors need to be investigated / punished.

It's important that Deloittes also get punished for their role in this sorry fiasco.

[kramch] 25/11/2009 15:54

put the hippo amongst the crocks perhaps?

I liked your bit about maybe the directors drive nice cars - our caring, attentive CEO was probably busy organising his Porsche racing team, whilst the inventory control system was crashing around him. K.

[raginghippo] 25/11/2009 15:33

Should put the cat among the pigeons!

[raginghippo] 25/11/2009 15:33

From: Peter [mailto:]
Sent: 25 November 2009 15:32
Cc: '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'; '[e-mail]'
Subject: Aero Inventory - (AI.) Investigations Must Take Place FRAUD ON A MASSIVE SCALE'[e-mail]'


To LSE, FSA & SFO,

You have a duty to investigate this company. Obvious fraud and deception have taken place which has resulted in many innocent people losing considerable amounts of money.

Please read the following which explains what we know so far and how this company has seriously mislead investors. Legal action must be brought against the board and/or the auditors.
November 2009

Investor's Champion Ltd Langwood House, , 63-81 High Street. Rickmansworth, Herts WD3 4DZ www.investorschampion.com

It was reported in yesterday's Financial Times that the aircraft parts wholesaler that went into administration last week has received 25 expressions of interest from potential buyers. Let's hope the administrators don't have to spend too much time and money exploring all the various approaches!

Jim Tucker, the KPMG partner and lead administrator said he was in early stage
discussions with parties including both trade and financial buyers about purchasing all or part of the struggling company. Mr Tucker is apparently of the opinion that it could take between two and three years to stabilise and turn round the business – not terribly encouraging for a buyer and perhaps an indication that 'the business' as a going concern is surely just about
worthless, with the only value residing in the stock!

I trust the LSE, FSA, SFO (a worrying number of 3 letter acronym organisations)
can both learn something from this debacle and come down hard on those responsible. The loss that might be suffered by many small shareholders is bad enough but it also does a disservice to all those well managed AIM companies (of which there are many) who are doing their best to get through the current recession and attract investor interest.

Senior management of Aero Inventory has enriched itself over the past few years at the expense of shareholders. As we reported previously, the Executive Directors received in aggregate US$5.3m in 2008 and US$3.6m in 2007. Wouldn't it be a nice gesture if they contributed to the administrators' fees – one can but dream! It's generally tough for small shareholders to go after the Directors so they will have to rely on those three letter acronyms referred to previously to act on their behalf. Having paid themselves handsomely over the past few years one can't argue that Directors wouldn't be able to finance a defence.

- Noticeable lack of support from the nomad/house broker
JP Morgan Cazenove, the group's nomad and joint broker, somewhat surprisingly
doesn't appear to have issued a research note on the business for a considerable
time or perhaps they have only distributed this to chosen clients! This appears highly unusual as the house broker can usually be relied upon to offer whole hearted support

– when did you last see a 'Sell' note from an AIM house broker!
I'm not sure of their other nomad appointments; however, I didn't think AIM was a speciality for the City blue bloods. With JPMorgan Chase set to take ownership
of Cazenove, senior figures at 'Caz' apparently stand to make huge gains from
the sale. Chairman David Mayhew is supposedly set to receive the largest
payout, of £18m-£19m. Perhaps Mr Mayhew and his colleagues might also like
contribute to the administrators' fees or even support an Aero Inventory
shareholder compensation fund – I know, dreaming again! I see that Goldman Sachs
has pledged US$500m over five years to help 10,000 US small businesses perhaps
Cazenove might like to initiate something in the UK!

Let's hope the LSE will have a good look at the actions of the nomad. We would
suggest that small shareholders might liketo write to the LSE pointing out their
responsibilities – please visit the following link for direction in this regard:
www.londonstockexchange.com/companiesandadvisors/ aim/advisers/rules/regulation.htm

Everyone is pointing the finger at the auditors and one has to wonder how they
conducted their last stock checks. Let's hope the Financial Reporting Council
('FRC'), who is charged with monitoring and enforcing these auditing standards, is called in. The auditors should be liable for any breach of their own duty of care and should also surely remain fully liable for losses directly caused by their negligence and misfeasance,

- What can shareholders realistically hope for?
The market capitalisation of the business prior to suspension was £138m. Net asset value at 31st December 2008 was US$311m, or approximately £185m applying the current £/$ exchange rate. However, we already know that stock in the
books at US$752m at 31st December was a work of fiction. There were US$48m of
intangibles in the net asset value which should also be disregarded. Lopping approx US$75m off the stock value (can it really be that material?) and disregarding the US$48m of intangibles would leave net assets of approx US$213m.
The group reported a pre-tax profit of US$33.1m for the 6 months and the most
prudent (clearly not prudent enough!) forecasts suggested full year pre-tax profits for the year ending June 2009 of approximately US$78m. Stock valuation
issues notwithstanding, if results were going to be materially worse than market
expectations management should surely have issued a trading update; no such
update was issued. In their interim results announced on 16th March 2009
management commented that 'Our existing business continues to trade broadly in line with management expectations' and 'the outcome for the year is still anticipated to be satisfactory'. Can one therefore hope that profits (prior to stock write offs) are not materially worse than at the interim stage Allowing for further write offs would result in a net asset value of approx US$180m or
£107m, some 77% of the current market capitalisation.

In breaching its banking covenants some dreadful penalty has, no doubt, also been triggered, lopping yet more off the reserves and NAV. Net bank debt at 31st December 2008 was US$467.1m but management also stated that since this time they had made progress in reducing stock levels (you're telling me!) with a sale of stock to Air Canada for US$100m. In Feb 2009 they also raised £11.9m (before expenses) through an institutional placing which must also have helped.

One can only hope that the bank's decision to stand firm and leading shareholders' reluctance to throw good money after bad may ultimately be supportive in salvaging something. All things considered, it's surely hard to
contemplate that matters deteriorated to such an extent that net assets are less than £60m, implying there is still some hope for shareholders. However, those in the market for aircraft parts will be relishing the opportunity to pick up stock cheap from a distressed seller which isn't going to make 'Lucky Jim's' task any easier!

As things stand most shareholders will probably be delighted with 40pence in the
pound, unfortunately I don't remember shareholders receiving a bean from other
recent AIM implosions. However, the extraordinary nature of the Aero Inventory
mess – 'Buy' to 'Bust' in a matter of days – suggests that anything is possible.
We would implore small shareholders to write directly to the London Stock Exchange expressing their concerns over the actions of management and indeed the advisers.


IT MAY ALSO BE OF INTEREST TO FIND OUT HOW RUPERT LEWIN (AI - Chief Executive) FUNDED THIS LITTLE SIDELINE...........

Best Regards

PH - Member of the Aero Action Group