Allan Hawkins' Cynotech sells Findata stake

Monday 30th August 2010

Cynotech Holdings, the finance vehicle controlled by 1980s high-flyer Allan Hawkins, sold its holding in Findata, according to an annual report that was tagged by the auditor.

The auditor questioned the report after Cynotech didn’t deliver all the information regarding its transactions in the year. The firm has been wind-down mode since Hawkins secured 78% of the company in a takeover bid earlier this year.

Cynotech sold its 23% share of online financial data services company Findata last week to major shareholders Todd Somervell and Fraser Guthrie for an undisclosed sum.

The data company made an operating loss of $2.7 million in the 15 months ended March 31, according to Cynotech’s report. Hawkins’ firm had written down the value of the holding to "zero as at 31st March" after it invested $750,000 in Findata in 2008. The sale will result in "a small recovery," it said.

Hawkins “doesn’t really want to have investments in which he doesn’t have day-to-day involvement,” Somervell said.

“We’re still in the same office” and the parting of ways was an amicable one, he said. He declined to say how much was paid for the stake.

The sale is included in Cynotech’s annual report, which was lodged with the NZX 20 days after the financier was suspended for missing its deadline to send in the document. Cynotech is looking at de-listing from the small-cap NZAX and is investigating an alternative bourse.

Auditor BDO Auckland couldn’t say whether the annual report “complied with generally accepted accounting practice” nor whether it gave a “true and fair view of the financial position of the company” after Cynotech didn’t provide “all the information and explanations that we have required”.

The auditor questioned the level of fair value impairments taken by the company’s directors, and wasn’t able to estimate the impact market uncertainty would have on Cynotech’s calculations.

It also had concerns about the valuation of loans to associated company Seating Systems. BDO says it didn’t receive “suitable audit evidence to support these expectations,” which ultimately impacted on the firm trading as a going concern.

Under a note entitled ‘going concern’ in the annual report, the company said it expects to have its bank debt fully repaid by February 2012, and has reached an agreement with its biggest secured funder settling half of the funds outstanding by assigning $3 million of fair value finance receivables.

It also said the majority of shareholders were aware the firm is in “rundown mode” with a focus on paying back debt and selling assets.

The shares, which trade infrequently, were unchanged at 2.5 cents on the NZX.

Businesswire.co.nz

Comments from our readers

No comments yet