3\  "the Beswick deal"

$2 BILLION FRAUD

BACKGROUND

Paul ANDERSON, the previous CEO and General Manager of "THE BROKEN HILL PROPRIETARY COMPANY LTD" (herinafter called "BHP"), during an interview on television (the Business Sunday programme on Kerry PACKER's Channel 9) indicated that there was some problem with Beswick.  I thought he was intimating that there was something not quite right with the relationship between BHP and Beswick Pty Ltd and that this problem could be overcome with some share dealings.  I understood that the share dealings were to be such that minimum taxation liability would be attracted to the manner of solution to this Beswick problem, because these shares were to be dealt with at the low share-price as BHP was in the mid-1997 to mid-1999 share-price trough (see following graph).

There was something not quite right with Beswick Pty Ltd's relationship with BHP - BHP was a major shareholder in Beswick!  Beswick Pty Ltd was established during the Robert Holmes a Court control challenge on BHP, way back in the period in which came to be known as WA Inc.  By using this Beswick mechanism BHP could magnify their control of BHP by requiring the input of less money for the same effect, than if the shareholders in Beswick instead chose to buy BHP shares!  Essentially the Beswick directors could exert an unfair amount of control over BHP, which being a large shareholder (18%) in BHP, could control BHP.  One can easily understand why this type of control is illegal - voting no longer becomes representative for the investment in the corporation.

EXPLANATION

Australian corporations are required to lodge Annual Returns (Form 316) with the Australian Securities & Investments Commission.  There are actually very few details required to be recorded on these Annual Returns - such information as registered office address, principal place of business, directors (and when appointed of resigned) as well as the 20 largest shareholders and the number of shares each held (as well as whether these shares are fully paid or not and share options).  Both THE BROKEN HILL PROPRIETARY COMPANY LIMITED and BESWICK PROPRIETARY LIMITED were Australian corporations during the whole of the period of interest.

 the BHP Billiton Ltd 'house of cards' 

(they'll fall like dominoes!)

The Annual Returns of interest were for the BHP 1998 and 1999 years - where Beswick Pty Ltd's largest shareholding in BHP (338 million odd) was reduced to less than about 6 million shares .  The shareholding data from these two Annual Returns was input into a spreadsheet programme which was used to analyse the change in shareholdings between these two years.  This spreadsheet is presented following and the column of major interest is the last column in the first table.  This column presents the number of shares held on the 9th of December, 1999 [{ 1999 Return }] minus the number of shares held on the 11th of January, 1999 [ 1998 Return ] - a less than twelve month period!

If you view the totals for each of these three columns;

                1998,            {1999}        and        {1999} - 1998

you'll come to understand that the -168,557,525 shares for the {1999} -1998 column is simply the total number of BHP shares for the top 20 shareholders for the year {1999} minus the total number of BHP shares for the top 20 shareholders for the year 1998 - i.e. nearly 170 million BHP shares "migrated" out of this top 20 shareholder group!

Would you believe it that these BHP shares appreciated* about $6 in value within two months of being sold!  This number of shares times the appreciation (170 million x $6 = $1 billion approx.) is quite a large figure!  Now you'd think that the Beswick directors would be given the proverbial kick in the "a" over this but it doesn't appear to be so because afterwards all of these Beswick directors were able to pick up their pay for another 18 months before even just one of them resigned!  One can only presume that losing nearly a billion dollars or so isn't all that bad.  Perhaps these directors should apply for jobs with HIH, One.Tel, Harris Scarf or ANSETT!

*	shows just how well these BHP shares can perform when the "brakes" are removed
*	- caused by continual misleading reports (considering the company overall) about the;
*	*
*	*

*	a\   MAGMA Copper purchase - "the jury's still out on that one" (Paul ANDERSON)
*	*
*	b\   cost over-runs on the Hot Briquetting Iron plant in Western Australia
*	*
*	c\   troubles at both the BEENUP Mineral Sands project and the
*	*
*	d\   HARTLEY Platinum mine in Zimbabwe

The reader can appreciate that the amount pocketed from "the Beswick deal" was about $1 billion but about $6 billion worth of BHP shares was sold from Beswick to cover for this particular swindle.  If all the shares had have ended up outside the "top 20" shareholder group then suspicion would have been immediately drawn to the scam so at least the bulk of this Beswick tranche of BHP shares needed to be sold to cover for this "migration" of shares outside the "top 20".

Just one point to mention there was an unusual amount of director activity around this time in Beswick.  Two directors were appointed on the 1st of March, 1999 and another was appointed about five months earlier.  The only long-standing director, maintained through this whole period, was the secretary.

Looking deeper the "big winner" was Chase Manhattan Nominees Ltd .  They increased the number of shares they manage by almost 80 million shares!  Now who owns these shares - that is the question!  Both the THE BROKEN HILL PROPRIETARY COMPANY LIMITED 1998 and 1999 Annual Returns only reveal that all of the BHP shares under Chase Manhattan Nominees Ltd's control were not held beneficially (i.e. Chase Manhattan Nominees Ltd. were not the owner of these shares - they only managed these shares).  This nomineeship is a good mask to hide behind!

NURSES, POLICE, FIREMEN, TEACHERS, AMBULANCE, STATE RAIL & RTA STAFF and other NSW GOV'T EMPLOYEES

The tenth entry on the table presented preceding is SAS Trustee Corporation which is one of the eight funds comprising STATE SUPER.  NSW's Nurses,  Police , Firemen, Public School Teachers, State Rail & RTA Staff and also other NSW Government Employees contribute to STATE SUPER.  At lest 20 million BHP shares were sold by STATE SUPER in 1999 and I'm suspicious that these shares were sold BEFORE the BHP share-price "recovery".  If so the opportunity to increase the worth of this superannuation by at least $120 million was missed due to this possible early sale of BHP shares!

update

Q/    When does 6% return guaranteed (on investment) not mean 6% return guaranteed?

A/    When you're (NSW) STATE SUPER and you've collected $1 billion in earnings surplus to the 6% guaranteed and you want to shift these surplus funds (amounting to $1 billion) to another purpose - not the genuine SAS Trustee Corporation (longer-serving NSW Public Servants) fund of STATE SUPER purpose!

  GOVERNMENT-SPONSORED FRAUD!  

 even the coppers were robbed !    -  by the BHP Inc. series of colossal frauds

OTHERS DEFRAUDED

BESWICK Pty Ltd was half-owned by THE BREWING GROUP and so half of this $2 billion fraud was borne by them.  About one quarter of Beswick was owned by BHP so BHP shareholders were defrauded of about $500 million too!

SIGN POST

Anyone reading this presentation would understand that I've put quite a deal of effort into investigating this "Beswick deal" and some may wonder why!  To explain this point I'd already 'cottoned on' to the "theft of the invention"/"share-price collapse" scam (both presented directly following) some months before and so I was aware that BHP had obviously manipulated their share-prices in an extreme manner.  Also I remembered that interview on television where Paul ANDERSON was talking about "the Beswick problem" -  I'd never seen him so self-conscious!  This was the trigger to spark this particular part of the investigation.  This nervousness was like a beacon and I decided to 'home in'.

One thing you'll come to appreciate is that scams can only be run when the situation is going to alter.  Such things like the transfer of property due to death and when the share-value is going to alter significantly are perfect opportunities!