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Frank Wilson, the founder, former managing director and a major shareholder of troubled sandalwood company Quintis, has accused the board of “blame-shifting” and trying to make him a “scapegoat” for its continuing woes. Source: The Australian
Mr Wilson, who resigned as Quintis chief in March after its share price crashed more than 25% in two days following a searing report by short-seller Glaucus, which revealed the company had fudged its sales figures, confirmed he remained part of a new international takeover bid to revitalise the world’s biggest Indian sandalwood farmer.
In his first interview since Quintis crashed and burned — it has been in a trading halt for the past five months after its shares plummeted from $1.40 to 29c a share — Mr Wilson said he was working with other big investors, all with “skin in the game”, to restore value in the company.
Mr Wilson said the asset value of the company — which the self-serving Glaucus report catastrophically stated should be zero — and its plantation assets had been badly eroded since he resigned to “pursue a change in control transaction”.
He condemned the Quintis board, including his former friend, director and replacement CEO Julius Matthys, for selling valuable sandalwood oil to a US buyer this year for a “fire sale price” of just $US3000 ($3830) per kilogram, which Mr Wilson said devalued the market price for quality sandalwood oil by at least 30%.
But even at those low prices, Quintis’s successful $8.4 million oil sale in the midst of its financial crisis proved the Glaucus report to be woefully inaccurate in its predictions that such oil prices were not achievable.
He said confidence in the sandalwood business, which has just completed its fourth commercial harvest in the Ord Valley of the East Kimberley, was at rock bottom, because the board and management had ignored and failed to communicate with investors and tree owners during the crisis.
Quintis manages 12,000ha of sandalwood plantations spread across northern Australia. Two-thirds are owned by private equity investors outside the listed company, including the Harvard University pension fund, Church of England, Abu Dhabi Investment Corporation and Red Rooster’s Frank Romano.
“The markets for Indian sandalwood remain diverse and robust; what has changed since March is a lack of confidence caused by a highly damaging but grossly inaccurate US-based short-seller’s report, and a lack of leadership and advocacy by the company to defend its position,” Mr Wilson said.
“They have preferred to target me rather than engage in positive advocacy. It has left many investors feeling nervous and as though their interests are being ignored.”
Mr Wilson maintained that — despite it now being clear that his claims of an order of 150 tonnes of sandalwood timber to Chinese buyer Shanghai Richer Link had been exaggerated — sandalwood and oil markets in China and India remained “largely untapped”.
“The problems (Quintis) suffered earlier this year were a once-off due mainly to an industry-wide customs investigation and political intervention in the timber trade in China; they should not impair the company or the industry in the longer term,” Mr Wilson said.
“It will be back on its feet very quickly and a lot of people are still interested in investing in the sandalwood industry, they just need a bit more positive advocacy from the board and management.”
But farmers in the Ord Valley near Kununurra, many of whom lease land for 15 years to Quintis to plant and grow their sandalwood trees, are nervous about the company’s future.
While it appears lease payments have been made and the tree plantations are being looked after, Ordco growers’ co-operative head David Cross said growers were keen to see the company’s future resolved quickly.
