Today FEA announced the MIS sales figure for 2009 as $23 million, a drop of 80% from 2008: http://www.asx.com.au/asxpdf/20090701/pdf/31jbyhdnldxlt0.pdf
FEA must be in breach of undertakings given to their banking syndicate as the latter have “agreed to waive relevant covenants for the June 2009 reporting period”.
There’ll be some anxious moments ahead for FEA.
FEA woes increased with a report in today’s Age and SMH about dodgy practices in the financial planning industry involving FEA’s MIS products.
ASIC reportedly raided the offices of financial planners who had allegedly arranged for fictional investors to invest in FEA’s MIS schemes using funds borrowed from FEA.
It is not known whether the $2 million worth of fabricated sales formed part of the $23 million in MIS sales reported to ASX.
Elizabeth Knight, the SMH reporter, commented that the practice of fabricating sales was known in the industry as tombstoning.
It can’t be an isolated case if a term already exists to describe the fraudulent behaviour.
Last Friday’s ASX announcement foreshadowed MIS sales for 2009 to be significantly less than $60 million achieved in 2006 and 2007.