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Source: ONE News -
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Allied is the little rural supplies company that believed it could, and it did, attempt to swallow the assets of the lame elephant Hanover Finance.
When Allied first floated its big idea, it had grand plans of the deal making it big enough to be included in the NZX top 50 index.
Needless to say, the sceptics were in abundance.
Why would Allied Farmers have any more expertise than Hanover, or indeed any expertise at all, in dealing with a loan book as big and troubled as Hanover's? So far, the sceptics appear to have had a point.
Allied Farmers admitted at its annual meeting yesterday that it has made mistakes. 'No kidding!' I can almost hear their disgruntled shareholders spluttering.
It also said it would be shifting its focus back to its core assets, which to me sounded an awful lot like it was admitting defeat.
On NZI Business this morning however, Allied's managing director Rob Alloway says it is not moving their focus away from Hanover, but now sees those assets as "non-core" assets.
Considering the hopes it initially pinned on the Hanover acquisition, that is significant.
I asked Alloway this morning, twice in fact, if he considered the entire Hanover acquisition to be among the mistakes Allied was acknowledging.
He equivocated. "There's some things that perhaps the company would have done differently."
Like what, I asked: not doing it at all? "Some acquisitions we would have looked at differently and executed differently" was as far as he would go today.
Some would say it was indeed a mistake, especially when you look at the situation as it now stands.
That $400 million loan book is now worth less than $100 million, Allied's finance arm - Allied Nationwide Finance - has gone bust, the company has struggled to restructure a mountain of debt and its shares are now worth all of two cents.
Nevertheless, Allied is still alive, and this week it appears, it's also still kicking.
Questions of fraud
When the Serious Fraud Office announced it has reason to believe Hanover may have committed fraud, Allied was quick to reveal it was the one (or perhaps among those) who took concerns to the SFO and sparked the investigation.
Whether or not there was anything fraudulent about Hanover's actions before its moratorium in 2008, or around the time its assets were transferred to Allied in 2009, will of course take considerable time for the SFO to determine.
It won't change much for the shareholders, who still have a long wait ahead of them if they want to see any value, however minimal, to be realised from the Hanover assets.
But they would no doubt like to see the SFO take a few scalps, anyway.
Alloway ruffled feathers a few months ago when he announced he had resigned his role as managing director and would stand down at the end of the year.
His announcement looked a lot like the captain abandoning a sinking ship, especially as his announcement came hard on the heels of new chairman John Louglin - the other face of the Hanover acquisition - saying he was leaving.
Alloway has now decided to stay until the end of his contract in June, at the request of the board, to continue his quest to turn the business around.
But that might be small solace for Allied's shareholders.
Almost exactly a year on from when the Hanover deal was signed off, it seems clear it will to take far longer than just months to turn this company around.
