APPENDIX I

STATEMENT OF DAVID M.  KOLS

I am the President of Regency-Superior Stamps & Collectibles,  based in St. 
Loui...
l was in St.  Louis.  He asked if I knew anyone in Manhattan,  and I gave him the name of a person
in New York to contact ...
Mr.  Martin said that he had talked to the Spanish regulators about Afinsa.  He
added that what irked him about Afinsa was t...
I asked him why he didn’t just ask these questions of GMAI and Afinsa.  He said
that he had,  but that it still doesn’t add...
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Senate report appendix i

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Anexos declaración de Greg Manning ante el Congreso de Estados Unidos, por los ataques contra la española Afinsa y su filial norteamericana en el NASDAQ, Escala - Senate Report Appenxix I

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Senate report appendix i

  1. 1. APPENDIX I STATEMENT OF DAVID M. KOLS I am the President of Regency-Superior Stamps & Collectibles, based in St. Louis, Missouri & Beverly Hills, California which is one of the nation’s leading auctioneers specializing in the sale of classic postage stamps, sports, space and Hollywood memorabilia. Also I am a regular columnist for Linn’s Stamp News, which is the world’s largest weekly stamp newspaper. In early 2005, I received a number of telephone calls from two men who asked me questions concerning Greg Manning Auctions Inc. (GMAI) and about GMAI’s European affiliate, Afinsa. The first of these calls was from a man who said that his name was Lewis Corrigan and that he was a research analyst with a fund called Kingsford Capital (tel. : 404-869- 93 l 8). He said that his firm was thinking of making an investment in GMAI, and wanted to know more about the stamp industry and about GMAI. At first, he seemed to be very matter of fact: He asked me about the size of GMAI, the kinds of deals it does, and about the future of the stamp industry. But then he asked me some questions that seemed to me to be strange, He said that he had heard a rumor that Afinsa has a connection to the Colombian drug cartel, and he asked me if I knew anything about that. I said that I did not. Then he said that he had been trying to value Afinsa’s inventory. He asked me if l thought the true value of those stamps supported the valuations that were being put on the stamps. I said that l didn’t know. Then, around late-February 2005, Mr. Corrigan called again. He said he bought a package of stamps from Afinsa, and asked if I could appraise the stamps for him. I told him that KL3:Z4 l 096 | .
  2. 2. l was in St. Louis. He asked if I knew anyone in Manhattan, and I gave him the name of a person in New York to contact — Paul Buchsbayew of Cherrystone Auctions — and I later heard that Cherrystone was contacted. Then, around the very end of February 2005 or the beginning of March 2005, Mr. Cotrigan called me again. He said he had obtained a valuation for the stamps he had bought from Afinsa and that the valuation was lower than the price that Afinsa said it would pay to repurchase the stamps. He said he was still doing his due diligence on the investment in GMAI, and he added that he thought the value in GMAl is derived from GMAI’s sole source arrangement with Afinsa. Then he said that he wanted to have a friend, a reporter for Barron’s, call me. I said that I would talk to the reporter. Corrigan returned to the subject of Afinsa. He started to tell me how he believed Afinsa paid too much for goods from GMAI. I asked him why Afinsa would overpay for the stamps it bought from GMAI. At that point, he just said that he Would have the reporter from Barron’s call me. In March 2005, I received a call from a man who identified himself as Neil Martin, a reporter for Barrorfs. He said that he had written the article on GMAl that appeared in Barron’s in September 2004. Mr. Martin asked rne a number of questions and made a number of comments. Both the tone and the content of what he said indicated to me that he was hostile to GMAI. For example, he told me that he or one of his people had bought their own package of stamps directly from Afinsa in Spain for investment purposes. They then took the package to the retail desk at Afinsa, and asked how much the stamps were worth. The Afinsa representative told him that Afinsa would not buy the stamps hack. KL3:24l‘J96l. l
  3. 3. Mr. Martin said that he had talked to the Spanish regulators about Afinsa. He added that what irked him about Afinsa was that there was a footnote in Afinsa’s financial reports which said that Afinsa’s outside auditors would not pass on the valuation of Afinsa’s inventory. Mr. Martin went on to say that he believes Afinsa is manipulating the price of GMAI’s stock. Afinsa is the majority shareholder of GMAI, and Afinsa is buying stamps from GMAI at high prices in order to improve GMAI’s profits. Mr. Martin also said that he spoke to the SEC about GMAI and Afinsa. He told me that he asked the SEC if they had received any complaints about GMAI. The SEC representative apparently said that there had not been any complaints. Then according to Mr. Martín, he asked the SEC representative whether a company’s sole source supply agreement with a related party, coupled with high prices at which the company is selling the goods to its related party, amounted to a manipulation of the company’s stock. According to Mr. Martin, the SEC representative said that based on those facts, the arrangement would probably be manipulation. From this, it seemed to me that Mr. Martin was trying to prod the SEC into starting an investigation of GMAI and Afinsa. So I asked him if he had filed his own complaint with the SEC, and he answered that he had not. Mr. Martin said a number of things which indicated that he was hostile to GMAI and Afinsa. He said, in words or substance, “I can’t figure out how Afinsa does it. There’s definitely something fishy. Can you help me figure it out”? He asked me if I had read his first article on GMAI, but didn’t ask me about the rebuttal that Greg Manning had published. KL3:2A IWSLI
  4. 4. I asked him why he didn’t just ask these questions of GMAI and Afinsa. He said that he had, but that it still doesn’t add up. He said that Afinsa was using new investment money to buy out old investments. I replied that, in other words, he was saying that Afinsa was running a Ponzi scheme. He then said that you can’t use that term, because it’s now part of legal terminology. Mr. Martin said that he thought Afinsa was manipulating the price of GMAI’s stock. I said that I didn’t think Greg Manning would allow that, and Mr. Martin said he was not accusing Mr. Manning personally of anything. Mr. Martin asked me how S100 million of stamps could be sold without moving the market. I said that you had to know more about the purchased stamps and the terms of the deal. Finally, I asked Mr. Martin why he was so hostile to GMAI. He said that it was because the shareholders of GMAI could get hurt if there was a run on Afinsa for redemptions of their investments. Dated: June 07, 2005 David M. Kols KL3:Z4 l 996i . l

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