FERTILIZER BARON PANKAJ OSWAL TO SUE RECEIVERS OF BURRUP
Controversial fertiliser tycoon Pankaj Oswal says PPB Advisory, the receiver and manager appointed by ANZ Bank to Burrup Fertilisers, is ”irresponsibly” using company funds.
Mr Oswal is suing Burrup Fertilisers for $US491 million ($A475 million) in cost overruns and is challenging the validity of the receivership.
Mr Oswal says PPB Advisory charging $7 million in fees and disbursements in less than six months is ”scandalous”, as is the $4.6 million in legal fees.
”It should be noted that virtually all my legal actions are against PPB Advisory, not Burrup Fertilisers,” he said.
”It is also interesting that even after all of this expenditure, Burrup still has $US41 million in cash.
”Not bad for a company put into receivership.”
Mr Oswal said it was ”one of many reasons” why he and his wife Radhika were challenging the receivership.
PPB Advisory was appointed receivers in December 2010.
Mr Oswal said the plant since then has lost 60 days of operations due to fire, equipment failure and mismanagement.
He said insurance premiums had skyrocketed, staff morale was low and lost operations had cost the company $80 million in revenue.
”It is worth noting that by comparison, when I ran the operation the plant ran for 420 consecutive days at 115 per cent of the name plate capacity,” Mr Oswal said.
He also said he believed there was collusion between ANZ, fertiliser company Yara and PPB Advisory to force him to sell at the lowest possible price.
Mr Oswal is also taking action against the Commonwealth Bank for selling his Gulfstream jet at a discounted price to an organisation in the United States.
”I am informed that ANZ and the Commonwealth Bank have also colluded to put me under further pressure,” he said.
Mr Oswal will take the matters to the Supreme Court in Melbourne in the next several months.
A spokesman for PPB Advisory said they were not interested in a public slanging match with Mr Oswal.
He said the sale process was continuing and the fees were ”firmly in line” with industry standards.
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THE world’s largest daily deals website, Groupon, which Google tried to buy this month for $US6 billion, has confirmed it is entering the Australian market.
The company is recruiting people to sign up to its email database before a launch next month into a market that is becoming crowded. The No. 2 player, Living Social, abandoned plans to start from scratch in Australia, opting instead for a joint venture with an existing company, Jumponit.
But because an existing Australian deals company has had its application to use the Groupon name in Australia approved, the Chicago company has been forced to use the domain name of Stardeals in Australia.
Groupon has engaged the lawyers Clayton Utz to take action against Scoopon, a Victorian company that has been offering online deals on products and services in Australian cities for more than four years.
Groupon lodged an intellectual property action in the Federal Court in Victoria in August and is due to go for mediation on January 21 or, failing that, to the courts on February 4.
Groupon is also taking Scoopon to court in its home state of Illinois, claiming federal trademark infringement, unfair competition and deceptive trade practices, even though Scoopon’s business is limited to Australian shores.
Do a deal a day websites offer discounts from local retailers, merchants and leisure operators, thereby restricting their operations to local businesses and consumers.
A Groupon spokeswoman, Julie Mossler, said: “The [Stardeals] site is live to accept subscribers but we are not yet offering deals currently. We hope to do so in the next month.”
An intellectual property lawyer, Trevor Choy, said Groupon was paying the price for failing to register its trademark or name as it expanded globally. The US case was doomed to fail, he said. “Groupon’s lawyers should have known that US trademarks can’t be enforced outside of the US against a company not doing business there.”
Andrew Mason, founder and chief executive officer of Groupon. Photo: Bloomberg
You might think anyone would jump at a $6 billion offer from Google, but Andrew Mason, founder of Groupon, amazingly rejected such a bid from the search giant to buy his online coupon business.
The 30-year-old founder and chief executive officer of Groupon, a Chicago-based internet-coupon service with more than 35 million users, walked away from an acquisition offer from Google, said a person with knowledge of the matter.
The proposed acquisition fell through amid hesitation by Groupon’s founding team, said the person, who requested anonymity because the talks are private.
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The start-up will decide next year whether to sell shares in an initial public offering instead, the person said. The discussions could resume if both sides overcome their differences.
It prompted CNNMoney.com to publish a video interview recorded two months ago with Mason that was cut from the final version. In it, Mason was asked if the company had ever had any buy-out offers.
“I’m hoping that McDonald’s or Exxon tries to buy us – like someone totally weird,” he responded.
Asked if he would sell to Google, he said: “No, I want to be part of someone like GE or something.”
Google had offered $US6 billion, including incentives that would be paid to Groupon’s managers if performance targets were met, people familiar with the matter had said.
Groupon would have helped its new owner expand in the $US133 billion local-ad market and lessen its reliance on internet-search advertising.
“Clearly Google wants to get into the local space and Groupon was one way,” said Aaron Kessler, an analyst at ThinkEquity in San Francisco, who has a “buy” rating on Google and does not own shares in it.
“I don’t think from a Google perspective that if they miss out, that there’s not other ways to get into local.”
Mason had the biggest say in the decision as the largest shareholder, said another person familiar with the talks. He had concerns about the strategic direction the company would take under new management, the person said.
Mason was also concerned about what could happen to merchant relationships and his employees, the person said.
Google’s biggest deal
Google chief executive officer Eric Schmidt was willing to pay almost twice the $US3.2 billion he spent on DoubleClick, his next-most expensive target, to add features and repel a threat from such rivals as Facebook.
Jill Hazelbaker, a spokeswoman for Google, said the company did not comment on rumours or speculation.
Julie Mossler, a Groupon spokeswoman, also declined to comment.
Google, which boasts $US33.4 billion in cash and marketable securities, had initially offered between $US3.5 billion and $US4 billion to buy Groupon, a person familiar with the matter has said. The start-up, which was also contemplating raising new venture funding, held out, eliciting a sweetened offer from Google, the person said.
The Chicago Tribune initially reported Groupon’s rejection.
Groupon’s growth
Groupon’s allure has rubbed off on lookalike coupon sites. Amazon.com said on December 2 it invested $US175 million in LivingSocial.com, another provider of daily online deals.
Founded by Mason in 2008, Groupon has attracted 35 million users in more than 300 global markets by offering steep discounts on such items as pedicures, hotel stays and bike tune-ups. The company makes money by keeping part of the revenue raised by the coupons. Groupon’s sales may top $US500 million this year, two people familiar with the matter have said.
Groupon had a valuation of about $US1.3 billion in April, after Digital Sky Technologies led a group that invested in the company. It has raised $US170 million from investors, including Facebook backer Accel Partners and New Enterprise Associates.
Google could have used Groupon to gather data on consumers as they interact around the time of a purchase, and then use that information to hone other products, including ads, said Ben Schachter, an analyst at Macquarie Securities Group.
Local focus
“Locally focused e-commerce transaction data tied to one’s Google account could be used to improve personalisation of other Google features as well as improve ad targeting,” Schachter, who rates the stock an “outperform”, wrote in a research note.
Google could also have incorporated Groupon coupons into the location-based services of its Android mobile operating system, said Yun Kim, an analyst at Gleacher & Co in New York, who rates the stock “neutral” and doesn’t own it. For example, as an Android user passes by a mall, Google could deliver coupons for nearby stores.
Still, Groupon was an unusual acquisition target for Google, which tends to buy companies that boast a technological advantage, such as online video, as was the case with YouTube.
To distinguish itself from lookalikes, Groupon plans to test new features that let businesses easily create deals through an online service called Groupon Stores. The company is also testing a feature called Deal Feed that lets users track favourite businesses as they might on blogging site Twitter.
Regulators would probably have scrutinised the planned acquisition of Groupon to ensure it doesn’t harm consumers.
“People are going to be concerned about what happens when you link Groupon’s daily-deal services to Google search,” said Dan Wall, an antitrust lawyer and partner at Latham & Watkins in San Francisco.
Andrew Mason, founder and chief executive officer of Groupon. Photo: Bloomberg
