Andrew brings over thirty years’ experience advising clients on M&A and capital raising deals, having worked with ASX-listed companies, multinationals, private businesses, private equity funds, and other financial investors.

Duane Rogers, CEO of SW said “We are thrilled to welcome Andrew to our Sydney Corporate Finance team. His depth of experience and proven track record in deal advisory and client service will be invaluable as we continue to grow our presence in Sydney and deliver exceptional outcomes for our clients. Andrew’s commitment to excellence and his collaborative approach perfectly align with SW’s values and our vision for the future.”

Andrew’s career spans senior roles at PKF Corporate Finance, Deloitte, Pepper Money, Sabre Group, and KPMG in Sydney and London. He is recognised for his expertise in financial due diligence, lead advisory, and valuation services across industries including real estate, financial services, transport, mining, energy, manufacturing, and consumer products.

“I’m excited to be joining SW’s Corporate Finance team to help SW continue its strong growth and outstanding track record of delivering high quality services to its clients. I’m very impressed by the consistently high calibre of SW’s partners and staff and am really looking forward to identifying opportunities for SW’s clients and the clients and people that I have worked with over the past thirty years,” said Andrew Jones.

This appointment reflects SW’s ongoing commitment to expanding our capabilities and supporting our clients’ ambitions in the Sydney market and beyond.

Media inquiries 

The post Media release | SW Accountants & Advisors welcomes Andrew Jones as Consulting Director, Sydney Corporate Finance appeared first on SW Accountants & Advisors.

Andrew provides financial due diligence and lead advisory services to clients that are undertaking M&A, divestment and capital raising deals. He has significant experience providing financial due diligence, lead advisory, and valuation services and draws on this experience in each of these areas to provide well rounded and considered advice to his clients.

Over a career spanning 36 years, Andrew has worked across a wide range of industries including real estate, financial services, transport and logistics, mining, energy and natural resources, manufacturing, industrial products and services, and consumer products and services.

Prior to joining SW, Andrew was a partner at PKF Corporate Finance for ten years and Deloitte Corporate Finance for seven years prior to that. Andrew held senior management roles at Pepper Money and Sabre Group following a 13-year career at KPMG in Sydney and London.

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This means that investors acquiring an interest in a Fund through the IM after the Fund has entered into a contract to acquire property may be subject to landholder duty, effectively imposing double duty on the transaction.  

The taxpayer is appealing the decision. In the meantime, capital raisings with respect to Victorian property will need to be more carefully managed. The State Revenue Office (SRO) is unlikely to provide a private ruling with respect to this issue until the appeal is determined. The SRO has stated in discussions that there were particular circumstances in the Oliver Hume case that led to this outcome. However, the relevant facts as referred by VCAT noted nothing significantly different from any other capital raising through an IM or Product Disclosure Statement (PDS). It seems that the 2 factors that the SRO and the court focused on were: 

1. in order for shares to be issued to investors, a minimum subscription needed to have been met 
2. there was a unity of investors, in that they were all joining together to acquire an interest for a common purpose, being a particular residential project.  

Both of these factors are common in most offers under an IM or PDS. SW is working with the Property Council of Australia and Law institute of Victoria to have further discussions with the SRO to get a better understanding of what made the facts and circumstances of the Oliver Hume case different, and to understand their position with respect to reviewing capital raising transactions in the past and in the future, as we await the court’s decision.  

As discussed below under Background, the legislation is drafted widely and we are of the view that the legislation needs to be amended to ensure that capital raises are not captured under the landholder duty provisions (regardless of the outcome of this Appeal). The outcome of double duty for funds trying to raise capital to acquire property in Victoria will be an inhibitor to property acquisitions in Victoria.  

The outcome in this case also raises uncertainty with respect to other States (except for NSW) that have similar provisions drafted for the aggregation of associated transactions.  

Background 

In Victoria, landholder duty only applies to investors who acquire a significant interest an interest of 20% or more if the landholder is a private unit trust, and 50% or more if the landholder is a private company.

In determining whether a landholder has acquired a significant interest, the interests of associated persons and interests acquired in associated transactions are aggregated and treated as a single acquisition.  

The term associated transaction is quite broadly drafted as an acquisition of an interest in a landholder by another person in circumstances which: 

• those persons are acting in concert, or 
• the acquisitions form, evidence, given effect to or arise from substantially one arrangement, one transaction or one series of transactions.  

Given the broad definition in the legislation, the Victorian State Revenue Office released Revenue Ruling DA.057 Meaning of Associated Transaction which stated that the Commissioner will not regard acquisitions of interests by independent members of the public as an associated transaction if the acquisitions are made in response to a genuine public offer under a product disclosure statement or prospectus lodged with the Australian Securities and Investments Commission. However, this will not apply if: 

• under the public offer, one person’s acquisition in a landholder is made subject to and conditional upon another person’s acquisition, or 
• the Commissioner considers that a person is taking advantage of this concession, particularly in cases where the public offer does not convert the landholder to either a listed company or public unit trust scheme.  

Example 2 of the ruling also provides an example where a private unit trust raises funds from 15 investors known to the responsible entity. In this example, the investors can apply for any number of units and their acquisition would not be conditional upon achieving a minimum level of subscription. The SRO’s view was that the investors’ acquisitions would not be considered associated transactions.  

Oliver Hume case 

In our view, the facts of the Oliver Hume case are no different from capital raises by other Funds through Information Memorandums (IMs). The facts were as follows: 

• a special purpose entity (SPV) was established to acquire a site for a resi development 
• the SPV was funded by debt and equity 
• the fund was marketed to sophisticated investors so it was not an ASIC regulated raising 
• the IM was distributed to investors appearing in Oliver Hume’s database. Oliver Hume held a database that had details of investors who had invested in their funds in the past 
• the IM was also distributed to third parties as part of consultancy and referral agreements 
• as soon as a target of $1.8 million is achieved, shares will be allotted to investors 
• $1.8 million shares were offered at $1 to some 18 investors 
• 14 of the 18 investors were from Oliver Hume’s database, 4 were external (2 were referred from the consultancy agreements and 2 were completely external).

The SRO commenced their investigation in 2017 and a decision was made in 2019 that the taxpayer was subject to landholder duty. As the SRO viewed the arrangement as substantially one arrangement, the interests acquired by the purchasers were aggregated and the landholder duty assessment was raised in 2020 for 99.99% of the land value in 2020. In 2021, the SRO made a determination confirming the assessment (but partially remitting penalties). Oliver Hume requested the decision be referred to VCAT.  

Court decision  

The court held that regard must be had to the actions and motives of both the transferor and transferee. The shareholders (although not associated with each other) each had a united purpose of becoming shareholders in the Company. The Commissioner outlined the following factors in support of the view that the transactions were related, connected and interdependent in a way that was integral to the circumstances: 

• transactions stemmed from the same offer and terms outlined in the IM 
• transactions were conditional on each other and interdependent, they would only occur if target subscriptions were met  
• purpose of the transactions were the same – raise $1.8M as part of a syndicated managed investment vehicle for a residential development project 
• investors applied to invest around the same time and under the same offer with documents defining the common purpose  
• possible to infer a unity of purpose for the investors, as they agreed on the terms based on the IM to support the development of the property and agreed to the constitution which established the management structure.  

The Court also held that the Commissioner’s concession provided in the Ruling has no force in law.  

How SW can help

The SW team has extensive experience assisting property fund managers across a broad range of accounting and advisory services.

We can provide you with expert advice across the lifecycle of your fund, from initial setup and structuring, to capital raising, compliance, risk management and more.

Should you have any questions on the implications of this decision on your individual business circumstances, please reach out to your SW contacts listed here.

Our team will closely monitor the case and provide further information if there are any updates.

Contributor

Robert Parker

The post Victorian capital raising | Risk of landholder duty and the Oliver Hume case appeared first on SW Accountants & Advisors.

Corporate advisory services

We leverage our deep industry knowledge, extensive international and domestic networks, strong technical capabilities and time-tested processes to help our clients with corporate transactions including:

• mergers and acquisitions
• business sale and divestments
• debt and equity capital raisings
• project finance
• joint ventures
• cross border transactions.

As your lead advisors, we project manage the transaction for you from – origination to completion – liaising with your other advisors as well as potential investors or acquisition targets.

Our team also provides strategic review and advisory services helping you prepare for a corporate transaction including:

• strategic reviews
• feasibility assessments
• financial modelling
• business case preparation
• sale readiness
• transaction readiness
• pre-deal valuations.

Transaction support

Whether you are looking to acquire / divest a business or raising capital you need independent advisors that can provide unbiased advice and help you understand and mitigate transaction risks. As your financial advisor, we offer a “safe pair of hands” that provide carefully considered and commercially relevant advice.   Our team offers the following services to help you navigate through some of the most complex transactions:

• acquisition due diligence
• vendor due diligence  
• financial model review
• investigating accountant reports for Initial Public Offerings (IPOs)
• IPO project management.

Valuation advisory services

Valuations are often complex with a wide range of legal, technical and pragmatic commercial considerations.

Our highly experienced team values businesses, intangible assets, derivatives and other financial assets for M&A transactions, financial reporting, tax compliance, and litigation purposes.

Our valuations methodologies are cutting edge and compliant with internationally recognised theory and practice. While theory is important, the cornerstone of our approach is demonstrating sound commercial acumen. 

Our team has extensive experience in delivering independent valuation assessments to assist clients in diverse range of matters including: 

• independent expert report on corporate transaction pursuant to Corporation Act and ASX Listing Rules
• business combinations, impairment testing, share based payments and fair value measurement for financial reporting
• business restructures
• implementation of employee share / option plans
• tax consolidation, tax compliance and stamp duty assessments
• shareholder disputes
• family law matters
• business sales & mergers
• public company takeovers
• related party transactions
• capital raisings.

Vikas Nahar and Philip Rundell are Authorised Representatives of ShineWing Securities Pty Ltd trading as SW Securities.

Australian Financial Services No 509026

Aurora Place, Level 7, 88 Phillip Street Sydney NSW 2000 

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