Graveyard digs up Pasminco tax losses

Bina Brown

The Australian

13 March 2004

SHAREHOLDERS of failed mining giant Pasminco will finally be able to claim their tax loss under a unique package set up by the privately run “company graveyard'' website, deListed.

Instead of waiting possibly years for Pasminco to be placed into liquidation and a declaration issued, the 60,000 affected shareholders can transfer the shares in a way which meets Australian Tax Office requirements to crystallise a loss.

Pasminco's assets have been sold into a new company, Zinifex, which will be floated soon.

A capital loss on shares in a failed company can only be claimed when a liquidator issues a declaration that there is no likelihood shareholders will receive a distribution in the course of winding up the company.

Pasminco was placed under the administration of Ferrier Hodgson in September 2001 but the company has yet to be placed into liquidation, so no declaration has been issued.

“If I thought the liquidation was around the corner I would not have devised the package,'' said deListed founder Tony McLean.

DeListed has made several submissions to the Parliamentary Joint Committee on Corporations and Financial Services -- which is inquiring into Australia's insolvency laws -- seeking, among other things, that administrators and receivers be empowered to issue a declaration.

“The problems that have affected Pasminco shareholders are common to many other smaller companies,'' said Mr McLean.

“Not only have shareholders lost their investment, they also have had no means of claiming their tax losses,'' said Mr McLean.

Under the deListed package, shareholders are being asked to pay $76 to transfer their shares to a completely unrelated company set up by deListed in such a way that it meets ATO requirements.

The money will cover administration costs. Another requirement is that shareholders complete a declaration of trust form signifying the shares will be held in trust until the share transfer is registered.

“New'' Pasminco -- Zinifex -- issued a prospectus earlier this month for a float which will allow a number of banks to recover some of their losses. But Pasminco shareholders get nothing.

Mr McLean said the facility being offered was a natural adjunct to his website, deListed.com.au, showing what was happening to failed companies and how to crystallise a loss.