Bartercard Boardroom Battle

Shareholders of BPS Technology have finally worked out what I’ve been blogging about for years – the Bartercard “Smiles-in-Suits” are crooks. They are now taking action to clean out the entire board citing small-time petty politics acting in chronic self-interest. Yup! That’s the sort of thing that these guys get up to all day and every day – outright greed; self-interest on steriods and deception from their a-holes to breakfast-time! All condoned and covered up by IRTA of course. AFR has a good wrap of recent events.

Bartercard is a failing commercial barter exchange – all metrics point to failure – ethics, client/member satisfaction, profitability, trade volume, membership numbers – it is and has been a poster-boy of the quintessential business failure with a shonky IPO on the ASX, Directors in it for themselves and a devaluing barter currency due to rampant, systemic debasement, all hidden from public view.

Jonathan Shapiro puts the latest boardroom scrap this way in his recent article at AFR entitled Battle for Bartercard heats up:

Shareholders of BPS Technology, the operators of the Bartercard payments network, are stepping up their campaign to replace the entire board of the Gold Coast-based company.

Fund managers Alceon and LHC Capital wrote to the board on Wednesday to express concerns about the way the company is being managed and governed after amending its notice to call for a shareholder meeting earlier in the week.

“Removing the entire board is never part of our investment thesis but, after our best efforts to engage co-operatively failed, we feel this action is necessary to preserve and then grow value for all shareholders,” Alceon portfolio manager Daniel Chersky told The Australian Financial Review.

Bye Bye “Entire Board”!

Now the troubles will still remain with inflation rampant within the Bartercard economy and failures in more than one sector of their business model (How is Tess doing anyone?), but I would admit that it would be nice to see the end of Trevor Dietz & Co. I’m actually surprised that he stuck it out as long as he did . . . he strikes me as more one to jump long before he was pushed, but we’ll see. He may still go before he’s pushed. He wouldn’t want the ignominy of being dumped as Chairman of the Board I would have thought.

The move lines up shareholders against management that includes the three founding shareholders, which own a combined 37 per cent of the company.

Alceon and Sydney hedge fund LHC Capital together own about 8 per cent of the company but say they have the “overwhelming” support of institutional shareholders that account for over 40 per cent of the register.

Mr Chersky said the company was reporting “healthy accounting profits, but cashflow generation is minimal and debt levels continue to rise”.

That’s right . . . as I have always said, Bartercard hemorrhages cash – always has; always will!

He also said there were concerns with the company’s “board composition and corporate governance practices”.

I’ve also pinged these goons previously more than once noting that there is a big difference between running private companies and public ones. Their shonky style as wild-west cowboys doesn’t go down well when you lift it to the big boys!

The letter sent to the board raises instances of what the funds claim are poor disclosures around insider transactions.

Surely not? In Bartercard? How could that be? [sarcasm!]

It also raised concerns about the handling of an agreement to appoint Iain Dunstan as chief executive, which was withdrawn after a contract was signed. Mr Dunstan is one of four directors the funds have proposed to replace the current board, which includes the chief executive Trevor Dietz and two other large shareholders of the company.

Crooks – to the core!

A spokesman said on behalf of Mr Dietz that the assertions relating to the company’s operations and financial position relate to its half year results and will be “addressed and resolved” when the company presents its full-year results on August 29th.

Oh no they won’t be – for they cannot be. BS, BS and more BS.

The spokesman said the CEO would not comment about concerns relating to corporate governance but would provide a formal response should a meeting be called.

Pants down!

Under current regulation, a meeting as proposed can be held no earlier than at least two months after the notice of intention to move the resolutions.

It’s not the first time Alceon, which was founded by former Babcock & Brown executives Phil Green and Trevor Loewensohn have turned activist, having previously been involved in shareholder campaigns at RHG, Crowe Howarth and Noni B.

“We have been a supporter of this management team but unfortunately they have proven unable or unwilling to make the shift from private partnership to ASX-listed company,” Chersky said. “The new board we are proposing, including two former BPS independent directors, unquestionably has the management and governance credentials to turn BPS around.”

BPS listed in September 2014 with a market capitalisation of $58 million, raising $28 million at $1 per share while Mr Dietz, Tony Wiese and Brian Hall retained $30 million at the time. The three shareholders serve on the board along with Murray D’Almeida and Garth Barrett.

In 2016, BPS raised $27.5 million of additional equity capital to finance the acquisition of Entertainment Publications, business that produces the popular restaurant and activity guide, The Entertainment Book.

Bartercard, founded in 1991, was one of the earliest cashless payment network systems, in which goods and services can be “bartered” rather than paid for using cash. It serves around 36,000 merchants and investors backed the company’s plans to use technology to drive future growth.

However the share price has lagged, and trades around 27 per cent lower than its listing price at 73¢ a share.

It will eventually end up a penny-stock as the truth all comes out.

BPS Technology was established as a desperate and deceptive measure to save the losses of the directors who bought it for too much from founder Wayne Sharpe. They took their small-time crook ways into the public arena, did a back-room deal with a crooked hidden director who arranged for pension-fund money to invest into BPS shares on the back of a dodgy prospectus and they have shuffled things around desperately ever since, on eof the directors getting his golden parachute the instant he was out of the two-year moratorium. The Tess software supposedly destined to conquer the world under the auspices of IRTA’s unique and glowing backroom endorsement simply doesn’t exist on the BPS marketing materials any more (guess why?!); Bucqui is an utter failure three years on and Bartercard (the flagship core operations) is struggling as always. Investors (shareholders) will find out eventually (when the house of cards eventually come falling down) that the barrel is empty. The new Directors should be looking VERY carefully into the health of the Bartercard Trade Deficit. If there is undisclosed trade debt (it’s in the order of hundreds of millions BTW) then they will only really have two options . . . take the loss and declare the Bartercard ship insolvent – or try to box on with the lies and deception.

Assuming that their efforts to clean out the Board are well planned and that they have the numbers, “Welcome to the weird world of Bartercard team!”

The next couple of months will be the time for cracking out the popcorn methinks!

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