David Tweed - Investment History

Investment History

In September 2003, the Supreme Court of Victoria found that Tweed's offer to purchase shares from investors in OneSteel was deceptive. He had offered to purchase them for $2 a share over a 15-year period through his company National Exchange Propriety Limited. At the time the accounting group KPMG calculated that this valued the shares at just 78 cents in today's dollars. In his ruling, Justice Robert Osborne stated that the National Exchange acceptance form was so worded that before it could enforce a binding contract on people tempted by low-ball purchase offers, they had to send in the shareholder registration number as well as the signed form before the deadline set out in the offer. The court action was undertaken by David Tweed against David Vane, a caretaker whom he took to the court to claim $977.

In December 2005 he made an offer (through his companies NSPC, DSPC and ASPC) to purchase IAG shares. NSPC offered shareholders $8.10 per share, paid out over 18 annual instalments of 45 cents per share. This meant that shareholders would have received the final payment in 2023. DSPC made an offer for $3.00 per share and another for $3.50 per share. According to IAG this was less than the lowest price at which IAG's shares have traded in the past year.

Through his company National Exchange, Tweed attempted to gain control of Clime Asset Management in 2005 through 2006, as well as calling extraordinary general meetings (at Clime's cost) to have the board of directors of the company removed. The board stated that investors bought into Clime due to Roger Montgomery a Clime director. By 30 June 2009 Montgomery had quit Clime after having sold his 25 year management contract for over $3m. At one point Tweed offered to be bought out of Clime at their net tangible asset value (NTA), which Clime refused to do. However, this attempt was halted by ASIC in August 2006, who raised "serious objections to the way the bid was structured" by Australian Share Purchasing Company Pty Ltd (ASPC). ASPC withdrew from the takeover soon after. Clime has consistently traded below NTA since.

In 2006, Tweed changed tack slightly and offered investors $13 per share, while the price was $8.91. However, he offered to pay them the $13 in 20 annual instalments of 65 cents per installment. This allowed Tweed to take advantage of the time value of money, while disadvantaging investors. He also wrote to AMP investors offering them $13 per share, while the price was $8.91. In a similar way to previous offers, Tweed offered to pay them the $13 in 20 annual instalments of 65 cents per installment. Tweed took AMP to the Australian Federal Court alleging that they unfairly sold his company, Direct Share Purchasing Corp (DSPC), the share register for an inflated figure of $44,000. Tweed believed that he should have been sold the register from between $231 and $750 and that it was against the Corporations Act to have charged a figure he believes was too high.The Federal Court and upon appeal, the Full Federal Court unanimously found Tweed's DSPC had been charged $17k by AXA for AXA's share register when a "generous" fee would be $250. In a letter dated 11 November 2007 Tweed's company Colonial Capital Corporation offered to buy BHP Billiton shares at a price of $42.47. Similar to offers mentioned above, payment was to be in 18 instalments of $2.36.

In March 2011, Justice White of the Supreme Court of New South Wales found that fund manager Perpetual Limited was justified in double-checking with shareholders before processing transfers, part of its fiduciary duties as the responsible entity. White also found that Perpetual was justified in not processing forms.

In 2012, Tweed settled a dispute over $35,000 on the steps of the Melbourne Magistrates Court with 77 year-old Annelott Gerandt. Tweed tried to buy units in the Colonial First State Mortgage Income Fund for half their face value from Gerandt, who thought that the paperwork she received was from Colonial.