ScamSmart Australia

CSL Limited Warns Shareholders of Unsolicited Share Offers

The Age, 14 February 2008

IN AUSTRALIAN business parlance, it's called bottom-feeding — the practice of sending out unsolicited offers to buy shares at well below their real market value.

The term was first coined to describe David Tweed who has made a career, and a fortune, out of trawling through the share registries of listed companies on the lookout for small shareholders.

Now, it seems, he has a copycat.

The names Patrick Dromi, and his company Share Buying Group, have popped up on Full Disclosure's radar before.

In March last year Bendigo Bank took time out from poring over Bank of Queensland's takeover bid to warn its shareholders to reject a $10 offer from Dromi's Share Buying Group.

Bendigo Bank's shares were trading at a shade above $17 at the time.

Then, in August, IAG shareholders received unsolicited offers from Share Buying Group offering $2.67 for each IAG share. They were trading on the exchange at $5.24 at the time.

The latest is a crack at CSL shareholders, who last week were offered $16.01 per share for their stock, which was trading above $34.

The letter sent by Share Buying Group to CSL shareholders looks suspiciously modelled on one of Tweed's old share shonks.

Stamped at the top are the words "this is a letter that requires your immediate attention".

Then follows a banner headline that promises a sum of money for your shares, to be paid within 10 days of handing over your security holder reference number (SRN).

Preying on small shareholders is an interesting sideline for Dromi, aged 50, who is the former manager of Inflation nightclub in Melbourne's notorious King Street district.

Demutualised and privatised organisations often have many small shareholders who never paid for their holdings, and are often unaware of how much the shares are worth.

They are easy prey for Tweed, Dromi and their ilk.

http://business.theage.com.au/snakes-put-the-bite-on-unwary-investors/20080218-1sto.html?page=fullpage