I am writing in response to an incorrect detail in Dr Paul Fidlon’s letter in the March 28, 2012 edition of the Armidale Independent, where he reported that Armidale Dumaresq Council has lost 30 million dollars in investing in Lehman Bros.
Firstly, it is disappointing that Dr Fidlon has publicly misreported this matter, especially after Council staff spent the significant part of a morning with him and other concerned ratepayers going through the whole investment history and providing documentary proof, which now seems to be disregarded. While accepting that Dr Fidlon may not be happy with Council’s contribution to “A Day on the Green”, which is his right, it is disappointing that he has attempted to justify this criticism with an argument he has been expressly shown is incorrect.
For the record yet again, Council has not lost actual cash of $30 million, or $20m, not $10m or $5m, and not even $3m. To date, Council has realised “actual cash losses” of around $2.8m on a number of investments that Council chose to sell at then market value. However, this loss has been somewhat offset by higher interest margins over the last six years on other investments that Council still holds. While Council has in previous years had to “write down” investments as required under accounting standards, which may give the impression of substantial losses, many of these write downs have been written back or investment principle returned in subsequent years. This fact seems to be lost on those too willing to criticise Council and use exaggerated figures.
The actual cash for many of Council’s investments still lies in trust accounts in England, ready to be returned to investors pending the outcome of appeal legal action against Lehman Bros US, for which Council, under a class action, has already been successful in the UK. The balance of investment monies is subject to the outcome of legal actions in Australia and Council is not prepared to accept and cannot quantify any further actual losses while these matters remain unresolved.
Shane Burns,
General Manager
Armidale Dumaresq Council
