Work Service Share Discussion Threads

[markt] 14/6/2011 17:10

Interesting the myriad of related party transactions and situations at WSE/LFI and its subsidiaries and at its office address.

I previously mention one for MWB loan notes. 67k.

If look at data for Registered Offices Investments Ltd (private co. with Mr D.Marshall and Mr Robotham as directors)

in 2001 it made a profit of 241k pounds (and managed to only pay 1k tax, clever !). and paid an interim dividend of 290k.


290k dividend !!
A similar amount of dividend as paid by WSE, with approx. 13M of assetts !!

(profit made by selling 389k shares in Monteagle Marshall S.A.)
It also held 53k shares in Conafex...another company where Monteagle marshall have a big shareholding....as Marshall family trusts have in LFI.


Perhaps the interest and gain in being directors of Monteagle companies and LFI/WSE is personal gain for the directors by buying/selling shares in these companies, and investee companies perhaps, at the right time.....rather than the benefit to WSE/LFI shareholders which over 10-20 years has been non-existant (LFI ...lower now than it was in 1993-6 !!)

[markt] 14/6/2011 17:00

Interesting

Admin. cost in 1997 = 84.2k. 1996 = 81.4k.
Income from dividends and interest received was HIGHER than the admin. cost.

Admin. cost now in 2011 = about 250 k/year !!

Multiplied by 3 !!
And income from dividends is less than admin. cost.
Makes me wonder if admin. costs are adjusted to use up the money available !!
(leaving nothing for shareholders....so divi to WSE shareholders has to be paid from assetts)

[markt] 13/6/2011 15:22

I believe that 2 RNS notices will be issued at some time by WSE.

1) A sale of shares by a holder of > 3%.

(my guess is that an RNS will be issued tomorrow 14th June....the transaction itself is already old news, number of days ago now)

2) A correction to accounts of WSE....only minor, no change to NAV ....but not good that accounts are not correct.

....you heard it here first !

[markt] 13/6/2011 13:03

farmingrgp
BTW
I think that WSE and LFI are > 50% owned....by combination with the holding of WH Lamb Holdings Ltd.
So small shareholders trying to do anything to change the operation of WSE or LFI is very difficult (or impossible) if WH Lamb Holdings Ltd were to agree/vote with LFI at WSE PLC or with Marshall family trusts at LFI PLC.

(WH Lamb Holdings Ltd is involved in property/construction/development sector and also perhaps in brick sector)

Mr D.Marshall was/is involved in property sector I think ...and perhaps there are some links with that Ltd company through that....I don't know...
Monteagle Marshall where D.Marshall is the CEO has a UK property subsidiary...
which I assume needs works doing
and M.M. is also large holder in Halogen...and they need work done to refurbish to re-model pubs/restaurants.

but no related party transactions with this co. are mentioned in the WSE/LFI accounts

Has the shareholding of WH Lamb Ltd always been controlled at share issues so that the total is over 50% ?...so that control is maintained..I don't know

====

We can see the related party transaction link with LFI/WSE....private co. registered at WSE//LFI address ..with an LFI/WSE director as a director there ...invested in MWB loan notes...pays 10%
the relationship with WSE/LFI perhaps played a part in the buy decision....LFI had 2 directors at MWB at the time...but of course completely free to discuss any info that is in public domain such as the accounts...

===

Are there any beneficial relationships ?
Difficult to know. But in business it is very common....backscratching...makes sense...

[markt] 13/6/2011 12:47

farmingrgp
Mostly I mention Mr D.Marshall as he is the boss at WSE/LFI....
and Mr Beale is of course under his instructions/control

and I am sure that Mr Beale is a skilled/experienced accountant

but

he has part of the responsibility of the poor performance of WSE/LFI imho ...since 2001 he has been the CEO of City Group since around then.....and a director of Lonfin (manages LFI investments, Mr D.Marshall, Mr Robotham and Mr Beale).

and City Group is in charge of the day to day management of WSE/LFI...noting that Mr Marshall is 'resident in South Africa' and CEO of Monteagle Marshall (with numerous subsidiaries, USA, UK, Virgin Islands, Jersey.....) which must be the main use of his time...

Mr Beale was partly responsible for the debacle at Doctors Direct since he was a director and the board allowed the co. to burn the money raised in the IPO in only 12-18 months including by directors and then called the administrator....a frightening number of related party transactions were allowed. 1/2M of WSE burned. Kept secret from WSE shareholders, no mention that it went bust in any WSE accounts ! Mr Beale is responsible for the preparation the accounts, by City Group (he is CEO).

[markt] 13/6/2011 12:25

Hi Farmingrgp
in case you are interested in further info ref. WSE/LFI and Mr David Marshall...

perhaps you are interested in the mention of lawyers over on the MWB and MBE message boards....includes ref. to article in the Telegraph which mentions lawyer's letter....and a major stake holder is piling in with RNS of protest...

Mr D.Marshall sits on the board of MWB....also chairman of WSE (stakeholder in SWL) and LFI.


Of course MWB/MBE do not affect operation of SWL apart from the common investor (WSE/LFI).
====

In the past I have suggested the break up of LFI and return of cash...just on message board...but other posters were against.

I think now that I have made visible to all msg board readers the poor NAV record of LFI and WSE over the last 10-20 years (lower now !) and the high cost of running them (3%)....that slowly more scrutiny will be put by the shareholders of WSE and LFI onto the performance and costs (and any use of company assetts by related parties !, the LFI apartment, benefit to a son not disclosed in AGM resolution for benefit scheme)

and that maybe if there is no marked change in performance then there may be more shareholder interest in making changes at WSE/LFI
===

WSE/LFI
There are attempts to pull strings.... ;-)
and complaints to the regulators about certain things.

===

NBI
I don't think there is much interest in WSE/LFI....Mr Marshall is only paid 7k/year as a non-exec. ...so I assume only a minor monitoring role.
NBI shareholder base is quite spread, no one has sole control so there is no worry I think about the WSE stake, 15%, there is no 30% owner to partner with to effectively take control.

[markt] 12/6/2011 13:58

BTW
the performance of the General Portfolio in the year to June 2010 was disgraceful/terrible.

1/2 was invested in blue chip and produced 17%...similar to the market...
and the other 1/2 produced almost 0 !! while the market was motoring....as it rocketed up from the trough of April 2009.

Would the General Portfolio be better off as a tracker fund instead of paying high costs, imho, of the personnel to try to manage it ?.

the 3% running cost is one of the reasons imho why WSE has performed badly over the last 20 years. NAV now is lower than it was in 1993/94-99 !

[markt] 12/6/2011 13:26

NAV of WSE

After 20 years and the NAV is about the same as it was in 1993/94 !!

(pre- 2006 have to multiply by 4 since consolidation, 1 share to replace 4)

1993 82p
1994 71p
1995
1996 65p
1997 64p
1998 73p
1999 71p
2000 119p
2001 120p
2002 80.4p
2003 88.4p
2004 92.7p
2005 83.2p
2006 90p
2007 100p
2008 58p
2009 50p
2010 61p

It is possible the the share premium account was changed in 2008....to allow dividends to be paid, otherwise stopped by law. (if the company had provided growth then such arrangments would not be needed).

[markt] 12/6/2011 12:48

Topvest
I hear what you are saying and agree with some of your points.....

however
the 3% running cost is TOO HIGH imo....and imo can not be justified for WSE.
how do the directors spend so much money ??!...they refuse to answer !!.

(WSE pays over 40k for office space....but it has no staff !!...it subcontracts the running of WSE to City Group....which also charges it 90k...
is WSE paying a high price in order to subisidise the private businesses being run from the same address, there appear to be at least 3 or 4 investment companies being run from the same address....belonging to different people I think incl. D.C.Marshall and Mr Latilla-Campbell (son of director that was on LFI board for 30 years)

is the real money being made by these private companies ? while WSE/LFI tread water
the company of Latilla Campbell made very high % profit recently...London Finance Corporation Ltd. (not LFI PLC)

====

'better examples of corporate excess elsewhere'
perhaps there are.....but if I am not a shareholder in the other companies then I am not going to devote time to investigate and try to get changes made....

====

...part of what I see as the problems with the management of LFI and WSE are what I see as a lack of integrity, transparency and honesty.
eg. Mr David C.Marshall writing a resolution of the WSE AGM of 2006 to allow him to use the LFI votes (44% of WSE) to vote on a related party transaction....which the law does not allow....and to intentionally keep it secret from shareholders that a son would be one of the 2 main beneficiaries of the scheme.

The other main beneficiary is I assume Mr E.Beale.

The company refuses to answer any questions about the Benefit schemes. Performance reqts. are secret. Who has options, secret.

=====

I note that the 2006 scheme was put in the AGM when the share price was rising strongly....
if the LFI or WSE share prices ever do well in the future....perhaps we will see new benefit schemes being put in place....(which the shareholders can not stop since the 2 companies are, in my opinion, controlled > 50% by concert parties....such that I have to ask....will normal long term shareholders receive anything ???....such as me who has held shares since 1999/2000

and if we do receive anything maybe our yearly % return taken over 10-15 years will be peanuts while the beneficiaries and Marshall family members may get a good return...in 1 go approx. 1M pounds of free shares may be handed out...and not having to put up hard cash to buy shares. (noting that the D.C.Marshall shareholding in LFI is the same as it was donkeys years ago, and 0 shares in WSE).
===

If WSE/LFI are being used for personal benefit of directors and/or related parties (especially while keeping it hidden from shareholders !!...by using subsidiaries, whose accounts the PLC shareholders do not receive) then small shareholders need to stand up and make their voices known imo. (for my concerns see past posts....36k car, use of luxury apartment, shares at no cost for a son, no performance targets made public, no justification of high running costs for WSE 250k (but on Plus, cheap).....)

===

BTW I don't think I have been ranting. the word 'ranting' infers empty shouting, with no facts or content.
My posts include real data and real facts, dug out of accounts of subsidiaries.
Facts that no one else has posted in the last 20 years of operation of LFI/WSE.
I am trying to make these facts visible to all shareholders (if they want to read ADVFN message boards) and to try to obtain changes at WSE/LFI which I think would benefit all WSE/LFI shareholders (greater openess/reporting, integrity etc). Complaints have also been sent to the 'system'/regulators since I think that certain rules have been broken by WSE/LFI.

And if the 4% benefit shares can have real performance targets attached then all LFI/WSE shareholders may be 4% richer if the targets are not met.
If WSE/LFI outperform over 10-15 years then I would be happy to pay 4% out of the outperformance. But 4% of the shares for free, if provide bad performance (as provided since 1993-1996 for LFI/WSE ) is not correct imo...and shareholders should not tolerate it.

[markt] 07/6/2011 17:22

NAV of WSE

(pre- 2006 already multiplied by 4 since consolidation, 1 share to replace 4)

1993 82p
1994 71p
1995 [ 89p market mid price. NAV = ?]
1996 65p
1997 64p
1998 73p
1999 71p
2000 119p
2001 120p
2002 80.4p
2003 88.4p
2004 92.7p
2005 83.2p
2006 90p
2007 100p
2008 58p
2009 50p
2010 61p

It is possible the the share premium account was changed in 1998....to allow dividends to be paid, otherwise stopped by law. (if the company had provided growth then such arrangments would not be needed).

In 1995 no dividend could be paid, due to the law. Same in 2009 !!.
Other years as well ??

[markt] 25/5/2011 10:47

Cautious Investor said....'rely on the auditors'

the 'system' does not work


example
Kahn has just been fined by the FSA just over 1M pounds. Involved or ran a Plus listed company.

"Kahn has never worked at an authorised firm regulated by the FSA but he was the subject of an FSA investigation and enforcement action in 2007 for his involvement in overseas boiler-room activities. In 2008 the FSA made Kahn bankrupt after he admitted liability for claims totalling up to £3.7 million made by the FSA on behalf of about 800 investors. "

So....the glorious FSA who we all think do a wonderful job of protecting us investors from dodgy directors ( ;-) he he !!)

made Kahn bankrupt in 2008...claims of 3.7M !!....but in 2010 he was still involved in a Plus listed company !! and fined over 1M !!
If penalised/punished people are allowed to continue to operate in the financial sector....then no surprise that they commit more illegal activities. Looks to me like the FSA itself carries a large part of the blame.

There appears to be .....NO system at all !

[markt] 25/5/2011 10:41

I challenge the LFI and WSE boards to issue accounts for the year to June 2011 which comply with the letter and the spirit of the regultaions

including related party transactions which so far WSE and LFI accounts do not detail the different transactions....(at the moment they effectively they 'these people and these companies are involved with transactions for the company'......whereas in the accounts of other companies they detail the transactions and the value)

===

Also, what happened to the motor vehicle bought by a subsidiary of LFI ?

around 40k around 2001....must have been quite a vehicle !

(and of course, not mentioned in the LFI accounts to shareholders)

Who for ?
Noting that Mr D.C.Marshall is "resident in South Africa" so would not expect LFI to provide him with a car there...
and Mr Beale....resident in London....metro trip from the LFI/WSE offices...so I see no need for any company car for him...

was the vehicle depreciated down and then sold cheap to the person involved ?

[markt] 14/5/2011 17:00

BTW
I had a look at another Marshall managed company, Monteagle Marshall.....yes, Mr Robotham is there as well....active chap for his age of around 76 ! (I'll be pleased to being do a fraction when I am 76 !)
and it exports coffee/tea etc etc and also manages a blue chip portfolio as does WSE and LFI.....

and subsidiary(s) in tax havens....Bermuda or Bahamas I think I recall

operating from the same offices as WSE and LFI...and renting the luxury apartment that LFI owns....

related party transactions all over the place !...spider´s web...

what a strange business model....tea export and blue chip investment fund

[markt] 10/5/2011 12:22

Can shareholders trust the word of the WSE directors ?

The 2006 annual report included a resolution (no. 8) to allow the company to buy in 10% of the shares of the company. No buy back took place.

The same happened in a future year, 2010 I think where the directors stated that they intended to buy back shares to reduce the discount to NAV.

What confidence can the public have in WSE if the dirs. do not do , at all, what they say they intend to do in the annual report ??!!

[markt] 04/5/2011 17:29

BTW lets not forget that over the longer term the WSE dividend is paid by 'consuming' the assetts of WSE, ie. the shares that it holds

with an increase in dividend you are over the longer term just reducing your NAV by the same amount...

around 2009 they paid a big dividend...even though the NAV had seen a big reduction......just to keep shareholders happy imho....(who did not realise that they were effectively paying themselves, ie. an illusion, false)

BTW, CRE if it goes up, it won't make WSE a real profit, rather just a reduction of the loss !, since WSE paid a higher price (ref. the accounts)...invested since 2000 ! zzzzzzz !

[markt] 03/5/2011 11:07

farmingrgp
(pls see previous message)

The LFI/WSE accounts state that Mr D.Marshall "has taken a leading role in the re-organisation and development of medium sized listed companies in the UK and overseas".

...at present and looking back at the performance of LFI since 1994 and of WSE it could be argued that this description is intentionally materially false/misleading.

Example the NAV/share for LFI is lower now than it was in the period 1990-2000, so one could argue that the companies have NOT been developed. On the LFI board I've posted the NAV history for LFI since 1994.

(...after almost 20 years you can not blame anyone else for bad investment performance...an investment manager has to manage, buy/sell as needed, move to cash, gear up etc, that is investment management...and LFI/WSE are investment companies).

I note that the FTSE index is now only 10% below its peak of 2007 after a bull run since 2003. Hence the UK market is not now in a temporary trough or crash situation.

Current summary of performance for LFI/WSE is as follows
Sanctuary Group. Imploded and De-listed. (D.M. backed it into a shell he was chairman of)
Creston. WSE investment is valued at approx. 1/2 of its current market price, after approx. 10 years !
Doctors Direct. Voluntary liquidation. 1/2M lost of WSE shareholder money. WSE accounts only 18-24 months before said 'company is doing well and we expect further growth'. WSE investment price was crazy imho, a dotcom IPO price.
SWL. Price has risen, but a large part of the growth is probably just consumed by the WSE running costs, 1/4M per year.
MWB. LFI investment is valued at approx. 1/2 of its current market price, after approx 10 years, life saving share issue in 2009 at low price, LFI did not take part.
FIF LFI investment is valued at approx. 1/2 of its current market price, after approx 10 years.
NBI. Has performed well for WSE investment has been a success.
Confex. De-listed in 2009/2010 to save costs. M.M.owns 47%
Halogen. De-listed in 2009/2010 to save costs. MM. owns 47%



BTW At Monteagle Marshall. Main company for Mr D.Marshall where he is CEO, all 3 sons are all involved there (I guess I would do the same if I owned 45% of the co. !). and Mr Robotham. Looks like 45% owned by Marshall family trusts. 531k$ in pension costs. Interesting I think the possible balance between family income (incl. pension benefits which add up over 10-40 years) and shareholder benefit.

[markt] 03/5/2011 10:37

Farmingrgp
Can you organise for someone to be a shareholder in WSE and LFI and then to visit their offices and obtain copies of internal papers ?
Apparently there is a legal right to obtain copies of any company papers. I guess that the Company Act gives details.

such as
- breakdown of costs (1M for WSE and LFI in total)
- breakdown of income (1/2M for WSE and LFI in total)
- breakdown of salaries at City Group including for any sons/wives/friends
- details of all related party transactions including those with other companies where Marshalls are directors including private companies.
- details of names of Employees of City Group....to see/record what sons, wives, friends are employed
- breakdown of all expenses
- paperwork to try to see why WSE pays 47k office rental cost to City GRoup, more than the total cost (43k) taht City Group pays to rent all of the offices when the offices are shares and WSE has no employees !! and is charged separately for the work that City Group does in administering WSE (90k).

LFI is probably the best one to be a shareholder of for this since it 'owns' City Group PLC where the actual management of WSE/LFI and Marshall related companies is done.

[markt] 03/5/2011 10:27

Hi NTV
Thanks for that info.
Some stuff has been submitted to the system.....but the UK system does not have a good track record for action imho

.... questions to the company, unanswered.

Accessing company docs.
Good idea...I would have to travel...so I will try to organise someone else.

[ntv] 02/5/2011 17:02

markt
i assume you are a shareholder in wse
to get an answer to your questions ,simply write to the company
if you are unhappy with your reply simply go to to lse aim regulation team or the fsa
neither likes to do much leg work so include as much imfo as possible
another source of imfo is companies house web site where other imfo is available cheaply about directors and shareholders. don't go through a third party
also all company documents should be made available to shareholders in full.
you can request a viewing but you may have to go to the offices
it will take a fair while but you will get some answers

[markt] 02/5/2011 15:46

qz4
"I wasn't looking for a specious argument. If you feel you have a case go for it. Otherwise you demonstrate your impotence and in doing so imo are likely to achieve the opposite to your desired ends. "

you mean that you will take 8% in free shares in WSE instead of 4% then !!?

[markt] 02/5/2011 15:44

Summary of data for the Mining Fund Investment. (useful for all investors)

Invested 1.5M pounds in WSE shares in August 1997. (2.7M 40p shares at 56p/share)
If sell now (at 37p/share) and then add on the dividends that they have received since 1997, the total is 1.6M. A bad return, inflation means they have lost money.

If the investment had produced a compound growth of 8%/year then the money (1.5M) would be worth 4.1M now but only produced a value now of 1.6M !!.

(imho pension funds calculate equity growth as around 7-8%/year during the period 1997-2010.....8% a year excluding dividends is not too high a figure to expect from equities, you are taking a risk so you need a higher return than a bank deposit account).


The investment performance provided by the managers/directors of LFI from 1997 to 2010 is bad.