Getback dominoes in unit trusts refuse to fall

Photo: pixabay.com

Lawyers for former Altus TFI trust fund board members arrested last week promise to sue the Central Investigative Agency and the Prosecutor’s office for ‘millions” in damages after “groundless charges”.

Getback AGM votes to carry on trading despite scandal details

The shareholders meeting of Getback, the debt trading firm approved its 2017 financial statements and gave the green light for the new board to...

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The fallout from the Getback scandal is claiming new victims in the Polish financial world. The board of the largest listed debt collecting and trading firm did not operate alone in overvaluing assets, according to investigators .

On Saturday, the court agreed to the prosecutor’s office request that two Altus TFI unit trust fund board members be detained for three months. The pending investigation involves their alleged collusion with Getback’s former board members to sell Altus’s portfolio company, EGB, also a debt collector, at a greatly inflated price to Getback, thus causing losses to Getback’s shareholders of an estimated PLN 160 mln (EUR 35 mln). The arrested men, Altus founder Piotr Osiecki and former board member, Jakub Ryba have both denied malfeasance and when Getback the scandal broke allegedly offered to reverse the deal.

Norges Bank withdraws

Right after the arrests, Norway’s Norges Bank Investment Management arm cancelled its agreement with Altus TFI to manage a portfolio of over EUR 400 mln of Polish equities. The withdrawal of the funds under management is equal to over 13% of Altus’s funds under management. Not surprisingly, despite denials of guilt, the value of Altus plummeted 36 percent on Friday and eight percent today. The Norges Bank shareholding included 98 Polish companies at the end of 2017.

Enter the Trigon

Meanwhile the association of Getback creditors, mostly bond-holding financial institutions, have called for the financial watchdog, the KNF, to halt one of Getback’s selling agents offloading management of a fund consisting of a Getback debt portfolio to another Polish unit trust fund. If the transaction came off, the creditors would be unable to grab the portfolio. The transaction is between financial group Trigon, and the giant Skarbiec fund managers, with papers worth over EUR 11 mln being involved.

In the spring, Getback missed bond repayment deadlines and was suspended from trading after falling foul of the reporting standards of the Warsaw Stock Exchange (WSE). The board are accused of overselling investments to customers and covering up the actual state of the finances of the company by sleight of hand trading of its portfolio boosting profits on paper.

The company was the darling of the markets last summer, after an IPO raising PLN 740 mln (EUR 170 mln), and continued to raise money from EUR 700 mln worth of bond issues in order to buy debt portfolios.

At the end of August the Getback AGM voted to continue activities in order to reach an agreement with its creditors. The total liabilities portfolio of Getback is over EUR 770 mln, while bondholders are owed EUR 150 mln. The main creditors of the Company are seeking a settlement for 50 percent of the value of their papers. The net of those who gained or lost on Getback is spreading. The Warsaw Stock Exchange, which has had its image dented by the maverick listed company, moved to steady its ship at the end of June, announcing a 20 point plan for the expansion of services, including a bond issuers credit rating service from 2019.

The exchange is likely to get a boost from the planned introduction of Employee Capital Plans 2019, a state-subsidised employee contribution retirement fund, which will be managed by investment funds, who will be able to invest on the stock market.

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