Sunday, 2 November 2014


Liberty Hedge HRCO Hirco Plc-Liberty Hedge Ventures Ltd letter

  Liberty Hedge - HRCO Hirco Plc-Liberty Hedge Ventures Ltd letter

RNS Number : 1220I
Liberty Hedge Ventures Limited
09 June 2011



                                HIRCO PLC EGM



                                 June 8, 2011


David Burton

Hirco PLC

14-16 Peel Road


Isle of Man



Re: Notice of Extraordinary General Meeting


Dear Mr. Burton:


As a shareholder of Hirco PLC  ("Hirco"), we express our grave and significant
concern with recent press release activity and statements made in the recently
posted circular to shareholders of Hirco, which included a Notice of
Extraordinary General Meeting (the "Circular").  As we are quite familiar with
the facts regarding the relationship between the Family and its associated
businesses and their relationship with Hirco, we are shocked to know the
lengths that the Board of Hirco will go to pursue a, so-called, strategy that
has not the slightest chance of achieving any benefit for the shareholders of

Your stated strategy appears to be two-fold: search for a buyer who would buy
assets or interests of Hirco and/or Burke Consolidated Limited or its
affiliates, or apply sufficient pressure on the Family so that they acquiesce
to whatever, still unstated, demand the Board has yet to make.

We believe that shareholders should be aware that the Board under your and Mr.
Barge's leadership have pursued what appears to be a classic entrenchment
strategy that will waste what assets Hirco possesses and dilute many of the
company's shareholders.  While we suppose that subject to the legal
obligations placed on directors, you can pursue whatever strategy you would
like, you just need to make it clear what you are doing so that the owners of
Hirco can decide whether or not to support it.  Please note that the intention
of this letter is only to set out the facts as we see them and it is not our
intention to make any comment or recommendation as to the buying or selling of
shares in Hirco.

No shareholder in possession of only the tales you wish to tell can make an
informed decision.  For example:

1.   Your public announcements suggest that additional pressure on the Family
and its banks will yield cash flow that would be available for distribution to
Hirco.  The reality is, it is more likely than not that additional capital
will be required to get the project companies to the point where there may be
cash flow available to distribute.  You are aware of this reality but choose
not to reflect it in the Circular.

2.   Your public announcements state that by applying pressure to the Family
they would somehow force their lenders to relax existing debt covenants to
permit free cash to be distributed up.  As you know well, there is no doubt
that whether or not there were covenants, there is no free cash to distribute.
In fact, Jones Lang LaSalle carried out a feasibility study in February 2011,
the results of which made clear that sufficient cash would not be generated by
the projects, and therefore distributable, before 2021. The board has chosen
to suppress this information.

3.   Your public announcement states that, in the face of the global economic
downturn, the Family chose to maintain pricing and thereby inhibited cashflow
generation. To allege such a causal link is entirely speculative. Indeed, you
have offered no evidence in support of the allegation and we do not believe it
to be true.

4.   Your public announcements state that a divergence of interests between
Hirco and the Project owners is destabilising and that the Board wishes to
address this.  As the Family has told the Board on several occasions, it is
prepared to engage in constructive discussions regarding a change in the
business relationship.  Following the initiation by the Board of its
aggressive and adversarial stance with the Family, which the Board now states
is the centerpiece of its business strategy, the only condition that the
Family has placed upon those discussions is that you and Mr. Barge commit to
resign your Board positions within one year.  Since then, for reasons about
which we could only speculate, you have refused to make a single proposal in
pursuit of a merger of the companies. We are concerned that you have not
disclosed this conflict to shareholders.

5.   Your public announcements suggest that the value to Hirco of its accrued
dividend rights attached to the preference shares issued by the Burke
companies (the "Preference Shares") outweigh the benefits to be derived from a
merger. Your supposition is that because of the value of the accrued dividend
attached to the Preference Shares, any merger that ascribes value to the
contributed interest of the Family would have to be supplemented with cash or
other assets.  However, as chair of Hirco's audit committee, Mr. Burton, you
undoubtedly know, that the realisable value of the preference shares need to
be assessed based upon the likelihood of recovery within a reasonable period. 
The Preference Shares have no certain realisation date and the apparent
reliance solely upon the accrued dividend attached to the Preference Shares as
the indicator of value ignores several things that robust analysis would
reveal: the Family has proposed to contribute additional assets to any merger
when it proposed to contribute Hirco Developments (Pvt) Limited, (or the value
of the underlying projects).  Your public announcements fail to state that. 
Indeed, your public announcement states the opposite when you knew that was
not true.

6.   Your public announcements state that there are on-going arbitration
proceedings that need to be addressed before the Family is in a position to
contribute the assets required to effect a merger.  However, you are well
aware because the Family has told you, in confidence, that any arbitration has
nothing to do with any potential merger with Hirco or any assets that may be
relevant to such a merger.  Indeed, your statement belies the fact that it was
the Family that has made all of the proposals independently of any matter
involving its constituents. Given that the arbitration has no bearing on the
merger, it was totally unnecessary for you to disclose confidential
information in this way.

7.   Your public announcements state that "[i]n light, inter alia [sic], of
the current differences of views as to a realistic merger ratio, relations
with the Family remain understandably difficult."  That statement patently
misleads the reader into believing that there have been discussions.  The
Family has made many attempts to engage in constructive, collaborative and
meaningful discussions with the Board.  While the Family's request made to you
and Mr. Barge regarding your continued Board service may make those
discussions awkward for you, the shareholders need to be informed whether or
not your refusal to engage in those discussions is because of your own
personal animus toward members of the Family.

8.   Your public announcements state that there "may be a number of potential
parties who may be in a position to propose [a purchase of both Hirco's and
the Family's interest in the relevant Projects] or alternatively might wish to
purchase Hirco's and/or the Family's interest in the Projects[.]"  We have
found no evidence that there may be any such parties that are in fact
interested or would propose a transaction that would be satisfactory either to
Hirco or the Family nor have we been apprised of a single indication of
interest.  Is there factual and verifiable support for this statement or is it
merely a truism that somewhere in the universe there might be one or more
parties that have the means and desire to pursue a transaction but have yet to
have been found.  Please clarify. In addition, your announcement fails to
state that the Family's consent would need to be obtained before there could
be any disposal of their interest. You have no power to impose a forced sale
upon them. 

9.   Your Notice of Meeting states that KPMG has reviewed compliance with the
information requests pursuant to Hirco's purported contractual rights and
areas of expenditure.  We are aware that the results of those reviews have
been available for several months.  To date, the results of any such review
have not been provided by the Board to the Family so that they can respond. 
Rather than suggest that there may be areas of concern, either publish the
review or discontinue making misleading statements about the Family or its
integrity.  Also, as the information that has been provided to Hirco is the
same in form and substance as has been provided since the inception of the
relationship, please also make clear whether or not KPMG was engaged to search
for the possibility that there may exist information that has never been
needed but could be used as a ploy for the second prong of your strategy of
seeking to ensure that the contractual and other legal protections are fully
secured, monitored and, if necessary, enforced.  If it is part of this
strategy, kindly set forth in the kind of detail by which you set forth a
series of covenants that you propose to enforce, how the failure to provide
documents that Hirco never requested in the past and needed a "Big Four"
accounting firm to find would give Hirco any right whatsoever insofar as it
relates to the achievement of a merger on terms acceptable to Hirco.

10. Your public announcement states that the reason that the Board has
re-evaluated the entrenched rights of Liberty Hedge Ventures to appoint
members of the Board is because "these rights are anachronistic."  Yet, you
also state that "a number of shareholders" have made comments about these
entrenched rights.  Given the strategy of hostility toward the Family, is the
withdrawal of entrenchment rights a product of the Board's efforts to alienate
the Family and Liberty Hedge Ventures, whose investment of $25 million was
based upon a mutual understanding that those rights would be maintained or
pursuant to a request of a particular shareholder or shareholders?  Does the
Board intend to make any changes to the Board before the next AGM?  Please

The effect of the serious inaccuracies outlined above is that no fair vote can
be held at the EGM on 28 June 2011.  We wrote to you prior to the publication
of the Circular alerting you to the degree of inaccuracy and misstatement in
the draft Circular but you chose to ignore our concerns without even asking us
to particularise our concerns.  We, therefore, had no choice but to set out
our concerns in this letter, which we also intend to make available to all
shareholders.  The board needs to correct these inaccuracies and provide
Hirco's shareholders with the information they are entitled to as a matter of





By: Authorised Signatory Investment Manager


cc:        Peter Barge

            John D. Chapman

            Douglas Gardner

            Kersi Gherda

            Nick Hellyer, as representative of HSBC as NOMAD

            AIM Team of the London Stock Exchange

            Richard Spedding, Esquire


For questions contact

Joe Deluca:

                      THE BOD RESPONSE

           Hirco Plc
(the "Company")
Response to Liberty Hedge Ventures Letter
LONDON - The Board of Hirco Plc (AIM: HRCO) notes the letter to its Chairman publicly released by Liberty Hedge Ventures Limited on 9 June 2011.
The Board is disappointed by the contents of the letter and disagrees with the interpretation put forward by that shareholder.   The Board continues to believe in the strategy set out in its Circular dated  3 June 2011 and stands behind its content; in particular, the Board considers that shareholder support at the forthcoming extraordinary general meeting on 28 June 2011 (the "EGM") is critical to the ability of the Company to fulfil its  outlined strategy.
The Board urges shareholders not be be deterred by attempts to distract the EGM process, and to vote in favour of the proposed resolutions at the EGM by submitting proxies or attending in person.
Shareholders are reminded that the deadline for receipt of proxy votes is 11.30 am (London time) on 26 June 2011.
Feb 6 2013 Times of India

MUMBAI: Realty firm Hiranandani has offered to buy out its London AIM-listed investment arm Hirco Plc. "We made the offer (to acquire Hirco) a few months ago," Niranjan Hiranandani, MD, Hiranandani Group, said. He did not disclose the offer price, but according to sources Hiranandani has offered to buy out Hirco for 55 million pounds. Hirco was started in London in 2006 as the investment arm of the Hiranandani Group with an aim to co-invest in large scale mixed-use township developments in suburban locations. tnnThis is the second time that the city-based group has offered to buy out the company. Hiranandani had made an offer of 100 million pounds to shareholders, which was rejected by the board last year, the sources said.

In October 2010, Hiranandani's estranged daughter, Priya, had reportedly filed arbitration proceeding against her father and brother Darshan, claiming that they had violated a business association agreement involving commercial rights to real estate projects. The father and brother, however, made a counter claim, alleging that the fight caused them to lose out on business opportunities. In December 2010, Hiranandani had resigned as chairman of the England-listed firm citing corporate governance issues, while his daughter had ceased to be the director on the Hirco board from September that year.

Hirco, which had been reporting decline in profits, had said that merger of the interest of the members of the Hiranandani family would simplify its investment structure and improve transparency as a fully integrated development firm. "The board continues to believe a merger of interests would also represent an obvious solution for Hirco and its shareholders, but only if on acceptable terms," it had said.



Niranjan Hiranandani

Net Worth
$1.23 B As of October 2012
India `s 52nd  most rich man .

   Personal View 
What next   ? What terms ?

        How does £7  become 25p .
           Seems to me this company has many friends in the shorting market.
When does the change of direction come .Only a court order and at last that is under way comes through to the market`s ears. About time, The Hiranandani`s paid up .Cheeky lowball offer of £55 million .Rumours of £100 million last time ,ie last year.
  BOD ask for £200 million ,therein lies the discrepancy .
  The solution is £150 million, of course ,ie six times our current share value .

       Keeping the beady eyes on this one from this point .

 Darn it , de-listed aand will have to wait that reinstatement comes before news .


March 28  ,  2013

Hirco Plc’s board has rejected Hiranandani’s offer to buy out the AIM-listed company for 55 million pounds. Since the agreement on price could not be reached between the two companies, the matter has been taken to the London Commercial Court and arbitration in Singapore. A previous offer of 100 million pounds made to shareholders was rejected by the Board last year. According to sources, at the heart of the rejected bid, lies an attempt of a hostile takeover of the firm by two of the largest shareholders that own almost 50 percent of the company – Weiss Asset Management and a Morrocan investor.
A spokesman for the group said these arm-twisting tactics instigated by foreign activist hedge funds and an opaque north African investor is not going to succeed. The family is committed to continue to protect and deliver product to our customers. We will work with our banks and ensure these hedge funds cannot sabotage the project and try and make a fast buck at the cost of our customers and local banks. Their tactics to starve the projects of capital will not work it will only boomerang in their faces. We will work with the Indian banks to do what is right by the projects.
It may be recalled that earlier this year, Doug Gardner, a former independent non-executive director, at Hirco Plc and Priya Hiranandani had filed for damages against Hirco Plc in the Isle of Man court. Niranjan Hiranandani, the past Chairman of the company too is suing Hirco Plc in the Singapore Court. According to a source, the dispute arises from the family’s offer to buy Hirco Plc at 55 p a share.
Weiss Asset Management currently has four seats of the five on the Hirco board and are represented by Ethan Milgram, David Burton, Peter Barge (past CEO of Jones Lang LaSalle), and John Chapman. John Chapman's experience includes investment funds in Brazil, Bulgaria, central Asia, Kazakhstan, Romania, South Africa, Turkey, Ukraine and Vietnam. His role as director of or advisor to these funds has typically been in connection with overseeing legal disputes and managing asset disposals. 

On February 21 2014, His Honour Deemster Doyle, First Deemster and Clerk of the Rolls, delivered his judgment in Hirco v Hiranandani1, in which the issue was whether in all the circumstances the Isle of Man was the appropriate forum for the trial of the dispute. Deemster Doyle identified that his principal task was to resolve the place that would be in the best interests of all parties involved, and where justice would be delivered. This, of course, mirrors the overriding objective under Rule 1.2 of the Rules of the High Court 2009, the principle on which the so called "new litigation" culture in the Isle of Man Courts is based, that is to deal with cases justly and efficiently.

The Facts

Potentially competing jurisdictional agreements existed, between the relevant parties, dealing with their inter-relationships. The first claimant Hirco plc ("Plc") was incorporated in the Isle of and subsequently listed on AIM.

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