Run Away Alloway

If there was an award for Teflon Man in the recent finance company debacles the winner would have to be Rob "Runaway" Alloway. He's dumped and charmed the dirt on to everyone else with little accountability himself. Chucked his toys at directors and Andrew McDouall claiming he knew nothing about a $500k fee paid. He's driven the Allied sponsored Porsche, been seen on Norrie's A-list and given the car a paintjob that Foss' gay ute would be jealous of.



Yet, Runaway Alloway, hibernating for winter in the sleepy hollow of Hamilton has escaped any sort of sunshine on his own behaviour. The worm has it seems turned a little on a man who one can only now describe as a vulture. Sludge reporter Matt Nippert has taken his eye off the Poo-Piss long enough to have a little look. Others also at the NBR who obviously aren't buying the alleged robbery in progress.




Yes, contrary to sound advice that all good Waikato rural Grandfathers hand out that you only pay cash for toys, Alloway has a penchant for financing his non-revenue producing depreciating assets.

Alloway fronted the $396 million Hanover-Allied debt for equity swap including the now rather dubious self-indulgent "reset" clause that will kick in at the end of June 2011. He ran Allied into the ground selling ex-Hanover assets he said he wouldn't and now in an act of absolute egregious audaciousness looks like he's going to attempt to run away with what's left of cherry picked assets and staff. Remember his claim:

"This isn't some rumpety transaction to create some paper company. We have the vision to create a solid rural services and financial services company with plenty of equity and very little debt," he said. "We want to grow a business which is high-performing and delivers equity growth and earnings growth in the future."

Not that interested in that now.....

In finance we call that the behaviour of a vulture capitalist. There is no shame in that from a businessman's perspective, the public of course don't see it as favourably. If however you have orchestrated the entire situation to your own advantage from the beginning there may be another word for it. And the behaviour itself subject to closer inspection with authorities. It seems Allied-lite is being born before us.

The rot set in way back when a "reset clause" or adjustment mechanism, allowed adjustments to Allied shareholders if there was a write-down in ex-Hanover assets below the initial $396 million. This gave Allied shareholders every incentive to get limited value at all. One shareholder more incentive than the others. Runaway Alloway.

In April 2011 a company called "RS Racing Limited" changed its name to Prestige Livestock Limited. The same day Alloway's car racing company seems to have been retagged into livestock, Allied's core business before sucking in Hanover investors. As a girl-racer chick with a love of fast cars over slow men, I realise RS is abbreviated German Rennsport (racing sport), used by Audi and Porsche most famously. In otherwords - awesome.



According to a comments person the shareholders are Allied staffers. So we can only have a guess what's going on here until a reporter skips in and does their job.



Even worse for Runaway it seems the Poo-Piss was loaned money on another core business activity of his - flash cars. Oh well, never fear I'm sure a vulture can come in and make an offer on the Diablo and stick it in his Hamilton garage as well.



The only winner since the Hanover deal has been Runaway, and now he is leaving. The reset at the end of June will kick in and the real question I will now find out is how much of the company Alloway will end up owning? And what his net benefit will be out of this? I have the formula from the offering documents and will run the numbers. The examples I have seen only calculated a $20 million write down, they didn't expect one of several hundred million. I will need a proper calculator.

For all his fluffing and screaming to the FMA and SFO about Hanover's conduct, Runaway's attempt to hide his own dealings is starting to unravel.

It's now time for everyone to stop giving Runaway Alloway the chance to fling shit at others and man-up and collect some of it for his own conduct in the piece.

Update - not a second too soon, Runaway is having the Herald run his lines that he is "glad to be leaving". As would anyone who has set-up something more profitable to go to. The Gibson family must be having interesting dinner scraps. The NBR going harder than the Herald puff pieces.

Alloway said he lived in Hamilton and could not say whether he would remain there or what he would do next.

Hmm....didn't interview the keyboard very hard for that one....perhaps a callback in order with a simple question about the racing car turned livestock company above?