Archive for July, 2015

More questions arise about CSIRO CEO’s actions in failed company

Posted on July 29, 2015. Filed under: Uncategorized |

Provided below is another article hot off the press in relation to CSIRO CEO, Dr Larry Marshall’s involvement in the failed disastrous public float of Tech Company Arasor.  Off particular interest is the transfer of shares by Dr Marshall into a trust for which Dr Marshall steadfastly claims to have no interest.

CSIRO chief Larry Marshall silent on Channel Island­s tax trust

CSIRO chief silent on tax trust

CSIRO chief executive Larry Marshall. Picture: Simon Bullard Source: News Corp Australia

CSIRO chief executive Larry Marshall has refused to reveal the beneficiaries behind a Channel Island­s trust he filled with tech­nol­ogy company shares worth up to $7 million when they were sold in a series of off-market trades.

Details of the structure used by one of the nation’s highest-paid public servants have come to light after an examination of the accounts­ of failed laser-technol­ogy company Arasor, of which Dr Marshall was at one time managing director.

Shareholders in Arasor are suing Dr Marshall, former Arasor chairman Simon Cao and other former directors of the company after it was delisted and went into liquidation in 2011.

A group of shareholders claims Dr Marshall was a central figure in the company’s collapse, alleging he and other direct­ors engaged in misleading and ­deceptive conduct, as well as ­serious breaches of the corpor­ations and ASIC acts in relation to the company’s financial reports and a disastrous $81m float.

An investigation by The Australian revealed Dr Marshall had 1.4 million shares paid into Grantley Limited, a “charitable trust” based in one of the world’s largest tax havens, Jersey in the Channel Islands. Grantley also appears to be registered in another tax haven, the British Virgin Islands.

Grantley and its holding company, NovaTrust, appear to be managed by Channel Islands-based financial planning company Stonehage Trust Holdings, which claims to be a “multi-family office and trusted adviser to international ultra-high-net-worth families”.

Documents reveal Dr Marshall, along with Mr Cao, was the owner of a company JJR Management that was the sub-underwriter of the Arasor float in late 2006. That deal earned the pair the right to share in 9.3 million shares in the company.

Despite the Arasor float structure allowing Dr Marshall to contribute up to 6.4 million Arasor shares to Grantley Limited, the company’s annual report and disclosure statement showed he only held about 20,000 shares.

The 2006 Arasor prospectus reveals that Dr Marshall entered a $US12,000-a-month “consulting agreement” with Arasor-Cayman, Arasor’s Cayman Islands-based operation.

“In June 2006, Mr Marshall was granted 1,400,000 options in Arasor-Cayman,” the prospectus states. “Mr Marshall subsequently exercised the option and transferred the ordinary of Arasor-Cayman into Grantley Limited, a charitable trust.

“Mr Marshall does not hold any interest of any nature in the trust or the trustee of the trust.”

All shareholders in Arasor-Cayman had shares converted into shares in the Australian-listed Arasor International in late 2006.

The prospectus also stated that Dr Marshall and Mr Cao “have an interest in JJR Management LL” and were entitled “to be issued 9,333,333 shares, giving it a shareholding interest of approximately 10 per cent”.

The shares held by the pair were not subject to restrictions, meaning they could be sold as soon as the company was listed.

In a statement to The Australian, Dr Marshall denied he was a benefic­iary of Grantley or was involved in shares traded by the tax haven trusts. “Litigation about ­Arasor is currently before the Federal Court, which limits my ability to comment,” he said.

“I can say that I was not involved in any share trades made by Grantley, received no distribution from Grantley and am not a beneficiary of Grantley. I believe the 1.4 million shares issued to Grantley were never sold.”

Dr Marshall did not reply to questions as to why he first contributed the shares into Grantley, how many shares he was entit­led to under the sub-under­writing agreement or whether these were later contributed to Grantley. Neither­ did he reveal the benefic­iaries of Grantley or Novatrust.

Dr Marshall has been CSIRO’s chief since January. The CSIRO will receive just more than $5 billion in funds from taxpayers and the private sector over the forward estimates period. According to its latest annual report­, its chief executive stands to earn up to $800,000 in salary, superannua­tion and bonuses.

Despite Grantley Limited’s holding of 6.2 million shares in Arasor­ and being Arasor’s second-largest shareholder, Dr Marshall was not on the list of top 20 shareholders when the company listed in September 2006. At listing, its shares were worth $9.3m.

The holding by Grantley Limited was eventually disclosed to the ASX in a document dated February 6, 2007 — five months after Arasor listed. However, on the same day this document was lodged another disclosure to the ASX revealed the sale of two million shares by Grantley Limited in an “off-market trade”, reducing the holding to 4.2 million shares or 4.44 per cent of the company.

These trade documents were signed by a financial planner with Jersey’s Stonehage and a lawyer based also in the Channel Islands.

Based on the Arasor share price on February 5, 2007, the two million Grantley shares were worth $6.8m when sold. Grantley Limited is not mentioned in any further statement or financial reports, despite still holding 4.2 million shares in Arasor.

After reaching a high of $3.90 in March 2007, Arasor’s shares plummeted throughout 2007 and were worth almost nothing by the end of 2008. Dr Marshall resigned from Arasor in 2008 and it was delisted­ and in liquidation by 2011.

Read Full Post | Make a Comment ( None so far )

CSIRO head accused of misleading and deceptive conduct by Shareholders

Posted on July 20, 2015. Filed under: Uncategorized |

Below is an article published by journalistt Leo Shanahan in the Australian on 14 July 2015.  In short, CSIRO CEO Dr Larry Marshall has been alleged to be a central figure in the collapse of a Tech Company and in misleading its shareholders.  Dr Marshall was also allegedly a member of the Tech Companies audit committee.

Those familiar with the Novartis matter may be excused for feeling a certain sense of deja-vu!

Dr Marshall need not worry about maintaining a high standard of accountability in his position as CEO of the CSIRO as history demonstrates that in such matters where the conduct of a senior executive (or excutives) of the organisation are called in to question, the CSIRO will appoint an internal legal counsel to reassure the executive that there are no questions to answer.

We have previously witnessed this in the aforementioned Novartis example and in another case where three senior officers of the CSIRO (including a member of the Executive Management Team) had their testimony rejected by the Administrative Appeals Tribunal as unreliable. Unsurprisingly, the acting legal counsel investigating the conduct of these three officers reported to one of these executives in their normal duties.

Dr Marshall should also feel much relieved and assured that when it comes to potential matters of potential conflict of interest, a simple statement with hand on heart is sufficient for a CSIRO Executive or even the CEO to reassure the Australian public that there is no conflict of interest where the rest of the Commonwealth Public Service and Agencies would go to great lengths to avoid being party to any such perception.

We note that this did not prevent Dr Marshall’s predecessor, Dr Megan Clark from presiding over decisions relating to CSIRO investment in  research in the mining sector despite being on the Australian board of directors of the Bank of America-Merrill Lynch (a significant investor in the resources sector in Australia) and taking up a position on the board or Rio Tinto before her term as CEO of the CSIRO had even expired.

Now we are not for one moment accusing Dr Clark of any form of wrong doing but anyone making decisions relating expenditure of moneys from the public purse must steadfastly avoid even the mere perception of such potential for conflict of interest.  This unsurprisingly is one of the first things covered in probity training undertaken by any Commonwealth employee tasked with undertaking purchases using public funds.

Another baffling question is why CSIRO employees who were on a team tasked with undertaking environmental impact studies critical to commencement of works within the Gladstone Harbour were subsequently appointed to a team investigating the significant death of marine life within the harbour after completion of the works.  Surely this has to be a stellar example of a very real conflict of interest!

CSIRO head Larry Marshal sued over technology firm collapse

Larry Marshall, photographed shortly after his appointment as CSIRO chief executive late

Larry Marshall, photographed shortly after his appointment as CSIRO chief executive late last year. Picture: David Moir Source: News Corp Australia

Larry Marshall, the chief executive of the multi-billion-dollar CSIRO and one of the nation’s highest-paid public servants, is being sued by a group of angry investors over the collapse of a technology company of which he was managing director.

Shareholders in failed laser technology company Arasor claim Dr Marshall was a central figure in the company’s collapse, alleging he and other directors engaged in misleading and ­deceptive conduct, as well as ­serious breaches of the Corporations and ASIC acts in relation to the company’s financial reports and a disastrous $81 million float.

Industry Minister Ian Macfarlane touted Dr Marshall’s ­significant private sector experience as a major reason for hiring him to drive a newly business-minded CSIRO. Dr Marshall has been serving as the agency’s chief executive since January.

The CSIRO receives just over $5 billion in funds from taxpayers and the private sector over the forward estimates period. According to its most recent ­annual report, the chief executive of the scientific research agency stands to earn up $800,000 in salary, superannuation and bonuses.

Dr Marshall, a former technology entrepreneur and physicist, was a managing director and executive director of the China-based Arasor, a company that sought to promote laser tech­nology in television and telecommunications.

He was also previously head of a series of other start-up technology companies, as well as managing director of technology venture capital firm Southern Cross Venture Partners.

Dr Marshall has taken over CSIRO at a difficult time, amid ongoing threats by staff of industrial action following $115 million in funding cuts and a pay dispute with management as the agency tries to reposition itself towards a model better suited to deal with the private sector.

Dr Marshall has made much of his private sector success, ­recently giving a talk at the Asia Pacific Creative Innovation conference, entitled Navigating the Valley of Death and Getting from Zero to IPO.

Arasor listed on the ASX in late 2006, with three separate capital raisings between the ­initial public offering and August 2007, worth a total of $81m. ­Despite initial investor interest in the laser technology, Arasor ended up being a financial disaster, with the company delisting in 2011 and going into liquidation shortly after.

In an ongoing claim before the Federal Court, it is alleged Dr Marshall, former Arasor executive chairman Simon Cao and other directors produced highly misleading prospectuses and ­financial reports prior to the three capital raisings.

It is claimed the documents hid Arasor’s disastrous profit outlook and falsely claimed the company was on track to millions of dollars in profit.

The group of shareholders, known as Caason Investments, also alleges that Arasor directors misled investors in the financial reports and prospectuses about tens of millions of dollars in contracts supposedly guaranteed by Indian and Chinese buyers for the lasers that, in reality, were not completed or never existed.

At its reported financial peak, at the end of 2007, Arasor reported revenue of $117m and claimed it was due to make a profit by the end of that year. In that year the company claimed Arasor’s revenue “had increased by 295 per cent” and this would be largely derived from the sale of its products to Indian and ­Chinese telecommunications companies.

However, the 2008 half-yearly report found that revenue for the half-year period had fallen to $10m, and bad and doubtful debts had risen to $50m. By the end of 2008, $53m had been written off in respect of the sales of wireless products to India. Dr Marshall was also allegedly one of three members of Arasor’s audit committee, which was responsible for ensuring the company’s financial reports were “legally compliant, consistent with committee members’ information and knowledge and suitable for shareholder needs”.

When asked whether Dr Marshall had previously declared the lawsuit, which has been running since October 2012, a CSIRO spokesman said the chief executive “had declared material interests in accordance with the SIR Act” but did not say whether this occurred before or after the interview process for the role.

“CSIRO is aware of the proceedings that relate to events before Dr Marshall was appointed chief executive of CSIRO … As the case is before the Federal Court we are unable to comment further at this time,” the spokesman said.

A spokesman for Mr Macfarlane told The Australian Dr Marshall “completed the required disclosure process for government appointment” but did not say when the disclosure was made. “It would be inappropriate to comment on a matter before the court,” the spokesman said.

At the time of his appointment in October last year Mr Macfarlane lauded Dr Marshall as “a scientist who brings significant commercial experience to this role”. “In particular, his experience in Silicon Valley, R&D development and the commercialisation of products and ideas will be valuable in ensuring CSIRO rightfully claims its place at the centre of Australian industry policy, building new links between business and research organisations,” he said.

Read Full Post | Make a Comment ( 1 so far )

Liked it here?
Why not try sites on the blogroll...