Some of these companies need to be researched carefully.
Wiseway owns 51% of Four Seasons Cargo Pty Ltd.
Who owns the other 49%, where are they based, and are they financially sound and accountable ?
Four seasons is a cargo sales agent, so the 51% acquisition would seem to be a good business move.
Also, as at 30th June, Wiseway had not entered into a deed of cross guarantee.
Have they entered into the deed since then ?
Because if not, then this effectively means that the company cannot be viewed as one (1) company, but only as a series of subsidiaries, which provides far less guarantee for creditors and shareholders.
You can read this on the 2018 annual report, and then read all about cross guarantee on the ASIC web site.
Also, it looks like the company is going guarantee for a loan to RFT Investment Management Pty Ltd (Roger and Florence Tong) for $7.5 million dollars from Westpac.
It looks like Roger and Florence used the Westpac loan money to buy properties, which they then have Wiseway lease back from them.
So it looks like Wiseway (the company) may be being used as a guarantee for the personal company borrowings of RFT Investment, and then have Wiseway pay to lease the properties from RFT.
I note that this is not illegal and is done by other companies also.
But is this fully ethical ?
I suppose it depends on your own individual interpretation.
Personally, I would want to see my Wiseway shareholder funds being applied to purchase assets 100% owned by Wiseway, and not for paying back leases to private companies like RFT Investments (who acquired the assets by using Wiseway as a guarantor).
Do other jurisdictions permit this kind of circular ownership and leasing arrangements ?
However, to Wiseway's credit, all this information has been duly declared.
You can read about it on page 30 (and other pages) of the 2018 financial report.
You should read the annual financial reports closely, because there are some other interesting elements included in them.
Salaries and wages went up by over $1 million dollars from 2017 to 2018.
Contractor costs went up by over $2 million dollars from 2017 to 2018.
Increases in employee benefits more than doubled between 2017 to 2018.
These increases may be related to growth in the business, let's hope so.
In 2017 the loans to directors amounted to about $1 million dollars, but there doesn't seem to be any reported in the 2018 accounts, which is a good thing.
I do believe the company may have a good future, though I will not invest until I know that all properties and warehouses and other assets are all owned fully by the company itself, and that the company is not being used as guarantor by any of the directors.
(the following is copied from the 2018 financial report of Wiseway).
View attachment 1352777
And as usual, as they all say, invest at your own risk, and do your own (thorough) research.
Gw
(20min delay)
