a candid assessment

The opening statement of the Chairmans report is as follows "Commquest started its short life with much promise reporting a loss of $52 million inthe financial year to 30 June 2009. It is distressing to witness such a profound destruction of shareholder value. There are no excuses" I would be interesed to know if this is shear incompetance or outright negligence. In the latter case the shareholders may have a case against the assets of the Directors. I would be interested to hear a legal opinion on this.

The Independant Experts Report (carried out by PKF who I've never heard of - they may be good guys and may have been recruited for fiancial reaons but Earnst and Young, the Companies Auditors, or KPM wold ahve given me more confidence) states in 10.2.4 that the proposed rights issue at $0.06 is not fair - because the shares are not worth that - but is reasonable becasue there is no other option. In the same section they state that the proposed underwriting by Co Investor is not fair but is reasonable. What would Earnst and Young or KPMG have said?

In section 10.6.2 if the Independant Experts Report it is clearly stated that Co Investor may acquire 95.59% of CQU, depending on the rights taken up, and it it gets more than 90% this will trigger rights of Co Invesor to compulsory acqure 100% of the remaining shares. At what price? I think this is the ultimate goal of Co Investor and would ahve been reassured had they said that they will not compulsory acquire the outstanding shares in CQU.

Bottom line is that the value of CQU sahres is $0.006% or less and if you own less than 10,000 shares (75% of the sharehodlers) you will be cash negative by selling through a broker as broker fees will exceed your return.

I own 1,168,700 shares in CQU which cost $148,452. These are funds I can ill afford to lose, but I am prepared to lose them if the Directors have acted allways in the best interests of shareholders and mistake were beyond their control. What I am seeing is, at best, well rewarded incompetance and possibly negligent Directors, and a vulture called Co Investor offering unfair but non alternative terms. I am an Aussie battler. My pride is not for sale. I a going to vote against all the resolutions. I recognise others may have a different view, but please vote against the resolution giving Co Investor the right to take up the shortfall in the rights issue or you are dead and gone.

An alernative way to resolve CQU's problems is to make a rights issue at $0.004, then a share consolidation. Much fairer.