Friday, July 14, 2006

Alticor/Amway leaders cheated investors, suit says
Sanctimonious Dick was just on my TV wagging his finger and telling me that we shouldn't get "down in the mud" and "blame others" for our problems. (he is running three different ads in my market now)

Looks like his lawyers are doing the same here. If someone cheats you out of a billion dollars when they have inside information, it's your own damn fault.


GRAND RAPIDS -- The way three former Amway Corp. Asian subsidiary investors see it, Alticor Inc. President Doug DeVos, Chairman Steve Van Andel and former President Dick DeVos helped cheat them and others out of more than $1 billion seven years ago.

Alticor attorney Robert Yonker says the former stockholders had an opportunity to recover their presumed losses, and they failed to do so.

The investors sued Amway Asia Pacific, its executives and its New York investment firm, Goldman Sachs, nearly five years ago. They claim they were forced to sell shares when the company went private and before stockholders could reap rewards of China's huge consumer market.

Two years ago, their case was dismissed by a Kent County Circuit Court judge. Their appeal got a hearing Thursday by a three-judge panel of the Michigan Court of Appeals.

Former shareholders Robert F. Wardrop, a local attorney, and Donald and Nancee Turnwall, of Irons, believe Van Andel, Dick DeVos and Doug DeVos effectively forced shareholders to sell stock the day it was announced China would be admitted into the World Trade Organization.

The WTO decision helped open the lucrative Chinese market to Amway and other businesses. The ex-investors claim China's entrance into WTO was not factored into an $18 per-share offer, even though Goldman Sachs and Van Andel had information China likely would be admitted into the trade group.

How did Van Andel have that information? Here is something that today's Press doesn't mention-
In addition to serving as chairman of Amway Asia Pacific, Van Andel also was vice chairman of the U.S. Chamber of Commerce, a group actively supporting China's bid.

"This is an example of corporate America abusing individual investors for their own profit," said Clinton Krislov, a Chicago attorney representing the plaintiffs.

(Source Citation: "Amway spinoff cheated investors, suit says; Some shareholders in Amway Asia Pacific say they had to take too low a price when the company went private.(Front Page)." The Grand Rapids Press August 7, 2003)

Here is a brief timeline on what happened back then.
In 1998, the Chinese government banned chain selling after its citizens complained about losing money on get-rich-quick schemes. The company was lumped into that group and forced to halt operations there.

The stock rose the next year after reports surfaced that Dick DeVos had met with State Councilor Wu Yi of the Chinese government. The stories said authorities were considering doubling the number of Amway representative offices in China.

According to the lawsuit, executives met in Chicago in September 1999 to discuss "Project Powerhouse," a plan for taking the company private.

About two months later, the United States and China began intense negotiations regarding China's entry into the WTO. It was believed that if China did not enter by Nov. 30, 1999, when the group was meeting in Seattle, it could be years before another opportunity arrived.

On Nov. 11, 1999, the principal shareholders delivered an $18 per-share offer.

Four days later, Amway Asia Pacific's board of directors said the offer was fair and in the best interest of minority shareholders, "all without considering the impact of China's WTO admission," according to the lawsuit.


Others had sued, also, and the suit bounced around looking for jurisdiction.
Amway Asia Pacific now is part of Alticor Inc., the parent of Amway. A company lawyer, Bert Hultink, said "this has no more merit" than two other lawsuits connected to the stock repurchase. Those complaints were dismissed or dropped.

The lawsuit started in New York, moved to Chicago and finally landed in Grand Rapids in late June after judges grappled with jurisdiction and whether the case belonged in state or federal court.

Today, Dick's lawyers claim that these people should have sued in Bermuda. Notice they don't answer the charge of how sleazy this was in the first place, only that it's the investors fault that they are in the wrong court. Gotta admit, that's a nice deflection.
Yonker said Amway gave shareholders a fair share. And, if they had a problem with that, they had an opportunity to increase their take.

The shareholders should have sought an appraised value of their share with an appeal in the Supreme Court in Bermuda, where the company was incorporated, Yonker said.

"They had an efficient judicial mechanism to determine they had fair value of their shares," he said. "They had that opportunity, didn't exercise it, and failed to use the tools at their disposal."

See? All your fault. Remember that when Dick screws you over in the future. You had the chance to stop him. Make sure you "exercise your opportunity" this November.

MichiganLiberal has more on this here and here. The bloggers are very close to the bigger story- something that I'm not going to try to begin to address. It's coming, and I'll let the pros handle it.

The hypocrisy in that new ad makes my head want to explode. I might have to stop watching TV before this is all over- that might not be such a bad thing though.