Wednesday, April 9, 2008

Would You Trust These Guys




Below is a fascinating little article that that illustrates the incredible consistency in the way our beloved founding families ( DeVos’s & VanAndel’s) conduct themselves in business. Their questionable ethics are not just restricted to IBO’s and ABO’s. Here’s what really bothers me. When a company go’s public it’s usually to raise money for investment in infrastructure or a new plant etc… It asks the public to invest their money in shares of stock with an implied promise to do it’s best to secure a return on their investment. It’s saying we don’t have the capital but we have the sweat equity, and if you help us we will do our best to make this win win. It does not mean they guarantee results, only that they will give good faith effort. Investment means risk, But risk with good faith! The article below is self explanatory read it for yourself.


GRAND RAPIDS -- The way three former Amway Corp. Asian subsidiary investors see it, Alticor Inc. President Doug DeVos, Chairman Steve Van Andel and former President Dick DeVos helped cheat them and others out of more than $1 billion seven years ago. Alticor attorney Robert Yonker says the former stockholders had an opportunity to recover their presumed losses, and they failed to do so. The investors sued Amway Asia Pacific, its executives and its New York investment firm, Goldman Sachs, nearly five years ago. They claim they were forced to sell shares when the company went private and before stockholders could reap rewards of China's huge consumer market. Two years ago, their case was dismissed by a Kent County Circuit Court judge. Their appeal got a hearing Thursday by a three-judge panel of the Michigan Court of Appeals. Former shareholders Robert F. Wardrop, a local attorney, and Donald and Nancee Turnwall, of Irons, believe Van Andel, Dick DeVos and Doug DeVos effectively forced shareholders to sell stock the day it was announced China would be admitted into the World Trade Organization. The WTO decision helped open the lucrative Chinese market to Amway and other businesses. The ex-investors claim China's entrance into WTO was not factored into an $18 per-share offer, even though Goldman Sachs and Van Andel had information China likely would be admitted into the trade group.
How did Van Andel have that information? Here is something that today's Press doesn't mention-
In addition to serving as chairman of Amway Asia Pacific, Van Andel also was vice chairman of the U.S. Chamber of Commerce, a group actively supporting China's bid. "This is an example of corporate America abusing individual investors for their own profit," said Clinton Krislov, a Chicago attorney representing the plaintiffs. (Source Citation: "Amway spinoff cheated investors, suit says; Some shareholders in Amway Asia Pacific say they had to take too low a price when the company went private.(Front Page)." The Grand Rapids Press August 7, 2003)
Here is a brief timeline on what happened back then.
In 1998, the Chinese government banned chain selling after its citizens complained about losing money on get-rich-quick schemes. The company was lumped into that group and forced to halt operations there. The stock rose the next year after reports surfaced that Dick DeVos had met with State Councilor Wu Yi of the Chinese government. The stories said authorities were considering doubling the number of Amway representative offices in China. According to the lawsuit, executives met in Chicago in September 1999 to discuss "Project Powerhouse," a plan for taking the company private. About two months later, the United States and China began intense negotiations regarding China's entry into the WTO. It was believed that if China did not enter by Nov. 30, 1999, when the group was meeting in Seattle, it could be years before another opportunity arrived. On Nov. 11, 1999, the principal shareholders delivered an $18 per-share offer. Four days later, Amway Asia Pacific's board of directors said the offer was fair and in the best interest of minority shareholders, "all without considering the impact of China's WTO admission," according to the lawsuit.
Others had sued, also, and the suit bounced around looking for jurisdiction.
Amway Asia Pacific now is part of Alticor Inc., the parent of Amway. A company lawyer, Bert Hultink, said "this has no more merit" than two other lawsuits connected to the stock repurchase. Those complaints were dismissed or dropped. The lawsuit started in New York, moved to Chicago and finally landed in Grand Rapids in late June after judges grappled with jurisdiction and whether the case belonged in state or federal court.
Today, Dick's lawyers claim that these people should have sued in Bermuda. Notice they don't answer the charge of how sleazy this was in the first place, only that it's the investors fault that they are in the wrong court. Gotta admit, that's a nice deflection.
Yonker said Amway gave shareholders a fair share. And, if they had a problem with that, they had an opportunity to increase their take. The shareholders should have sought an appraised value of their share with an appeal in the Supreme Court in Bermuda, where the company was incorporated, Yonker said. "They had an efficient judicial mechanism to determine they had fair value of their shares," he said. "They had that opportunity, didn't exercise it, and failed to use the tools at their disposal."
See? All your fault. Remember that when Dick screws you over in the future. You had the chance to stop him. Make sure you "exercise your opportunity

So let us reflect.
1. IBO’s in good standing denied bonuses they earned
2. Loyal IBO’s gouged for years with overpriced products
3. DeVos’s launch new networking biz (Fanista) developed over last 2 years in secret and excludes Q/A IBO’s
4. Shady hospital merger to access liquid cash to funnel into holding company ( alleged but consistent )
5. Orlando Magic arena: taxpayers pay for arena Magic organization stops airing home games on free network affiliates in Orlando area ( fans stiffed aka fan non appreciation day )
6. Spectrum health ( DeVos owned ) raises prices increases profit margins on the heals of GR hospital demanding higher reimbursements from BCBS or it will no longer accept BCBS insurance.
The list go’s on and on and on
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4 comments:

Anonymous said...

Has anyone written to the SEC yet about the AAP stock situation. I was aware of it but didn't own any stock personally at the time.

But I do believe there should be enough information for the SEC to begin an investigation into a possible insider trading scandel. There's just too many factors about the timing for that to have been coincidental.

Can we say Martha Stewart?

April 10, 2008 at 6:59 AM
Anonymous said...

Nearest I can figure because the company is incorporated in the Bahamas not much can be done. I may be wrong.
q-less

April 10, 2008 at 1:40 PM
Anonymous said...

"Old story"

New story..

http://blog.mlive.com/chronicle/2008/04/
ohio_fines_devos_pac_52_millio.html

(2 line link - you need both lines)

April 11, 2008 at 11:29 AM
Unknown said...

Hi. This is Wendy Branson at the Team Office. Can you please contact me as soon as possible at wendy.branson@the-team.net ? Thank you!

November 22, 2010 at 7:45 AM

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