Birch and Waite ......latest Blue Sky project, page-35

No Argument at all, my issue is that they have been trying to sell the business since early 2017 unsuccessfully (if you believe the AFR). There was a mandatory revaluation required for the business in January 2018 which was not disclosed to the market. Which means that there are three (3) possible actions that they took:
1. They did not do a valuation as required - Reflects a failure of process;
2. They did a valuation and it was unchanged - Failure valuation principles or fraudulent practices;
3. They did a revaluation (and moved it down) - Failure of disclosure, but they also didn't reflect this in their financials.

GEM has been disclosing to the market since 2016 that there are headwinds in the childcare industry and that they are under pressure. Plus the AFR and couriermail have been having a running commentary on the unsuccessful sale process of FEL.

Now don't get me wrong, I dont take a negative view on BLA because of one under performing investment - not at all.

My issue is of transparency of of disclosure, which the board and management still don't get. No body is going to trust you to manage $4 Billion of other peoples money (or $1.5 billion of you believe Glaucus) if you only report good news and sweep bad under the rug. They should have taken ownership of this issue 9 months ago and disclosed the problems and announced a writedown. Even when Glaucus called them out, what they should have done is said, YES there is a problem with FAL and we are addressing it. Rather they said, no no, look away, nothing to see here.