The Lake Alice Forest


The Lake Alice Forest

In January 94, the registered office of a company called Cullinane Abraham Shelf Thirty Limited was located at Agriculture New Zealand in Palmerston North.  According to title transactions downloaded from Terranet, Cullinane Abraham appears in November 94 to have bought 142.8540 ha on Lake Alice Rd for $650,000.  Two mortgages to Countrywide and an agreement with Waimea Holdings posted on that same day.  As of May 98, no other transactions had posted.

According to the Napier Companies Office, Cullinane, reportedly a wholly-owned subsidiary of AMP Perpetual Trust and acting for Flat Rock Forests Trust, executed a mortgage against the land in August 94.  A debenture was executed on the same day.  Don Simcock and Tony Hassed signed these documents, though there is no document in the file to indicate that they had been appointed directors of the company.  Cullinane Abraham changed its name to Lake Alice Forest Limited in October 94.

On 24 May 95, an Annual Return was filed at the Companies Office in Wellington (the type of return that did not ask if any charges were outstanding).  The date of the return was given as 23 May 95, but the year had been overwritten to be 94.  That the return might really be for 1994 was contradicted by several things — the name on the return was Lake Alice, though that name was not assumed until October 94.  Furthermore, the file did not officially move from Napier to Wellington until December 94, and no document on file authorised or documented it.

The return showed the previous owners had transferred 999 shares to AMP Perpetual Trust and 1 share to Perpetual Nominees Christchurch in May 94 — three days prior to the amended date of the return.  The share value was shown to be $1,000 per share and there were 1,000 shares.  Under “Capital Paid Up - Full (Yes or No) was written (by Gilbert Swan partner Susan Peacock) “Not known.”

The next document filed is an annual return dated 30 November 95.  This return shows the same previous owners as transferring 999 shares to AMP Perpetual Trust and 1 share to Perpetual Nominees Christchurch, but this time in May 95.  (This transfer was after the date of the mortgage and debenture.)  The share value was still shown to be (likely erroneously) $1,000 per share.  Peacock still did not know whether or not the capital was paid up.

The FRFT annual return for 31 March 95 said that 142 ha next to the Lake Alice Hospital were acquired in July 94 for $705,106.  Seventy-seven ha were planted in 94.  The next year’s return said 54 more ha were planted.  The full PriceWaterhouse review said 5.7 ha were established 1974-79.  The rest were planted 94 - 96.  They said the harvest value by 2002 would be $607,015, which would provide a profit of $130,165.  Since the forest was reported to cost $705,106, it is not clear how this profit was calculated.  PW projected an immediate sale to bring only $257,602, which would result in a significant loss.  If Lake Alice Forest was worth only a quarter of a million or so in 1998, why did AMP Perpetual Trustee allow it to be purchased for nearly three times that amount four years earlier?

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