The “
Law of Holes” adage first appeared in the Washington Post dating back to 1911.
“Nor would a wise man, seeing that he was in a hole, go to work and blindly dig it deeper…”
.... is what first occurred to me when I read last night's after market announcement.
It was an aware letter from the ASX. "When did FFX
first become aware of the placement? answering this question,
please specifically address whether FFX was aware of the Placement:
3.1
at the time of the Market Speculation Announcement"; and/or....
Now unless our management/BOD have a different definition of the word "aware" than the rest of us, then answering NO! is just digging the hole deeper. The clear honest answer, was and is, YES. They were
aware of the placement because they had the conversation with the brokers, asking for potential placement documentation.
Firefinch, by misleading the market instead of going into a trading halt then suspension after the AFR story have lost credibility in their announcements. They have now kept digging.
When they next announce anything, should anyone believe them?? Why?? Do they only use deception in relation to cap raises?
Here is part of the board charter from the Firefinch webpage, pg 2 part k under Board responsibilities...
(k)
encouraging a culture of ethical and responsible decision making and behaviour
The board itself by using the denial announcement on 2nd December are outside their own charter. That announcement and yesterday's follow up denial of doing what they had done is nowhere near being ethical and responsible.
How about owning up to a bad decision, try and regain some credibility, honesty and integrity instead of digging a deeper hole??
That response letter might satisfy the ASX (it shouldn't as it didn't answer the question), but is doesn't satisfy me and a whole lot of other shareholders that expect honesty and integrity from the people we pay very good money to run the company.
It's shareholders that will suffer from this clear mismanagement (by the entire BOD) of the current situation.
What I'd like to see is the BOD take responsibility, and paying the penance by something like ....
1. A full apology to shareholders and the market for the deceptive announcement, no excuses, that just digs a deeper hole..
2. A promise to uphold the board charter of acting and behaving ethically at all times as per the charter they signed up for!!
3. The voluntary relinquishment of performance rights as penance for not acting in accordance with the board charter.
The correct action was to do a TH and suspension while organising the placement. If it came at a lower price because of the AFR leak, then sue the lead managers for breaking the non disclosure agreement. As it is the BOD should be seeking some redress from the lead managers for the leak.
We have 2 great projects, with the share price well under what it could be. If the market doesn't trust the management and BOD, then the share price may never get to where it should be, as announcements can't be trusted. Without paying a price for misleading the market we risk going nowhere until after the demerger for LLL (new BOD and management there), and god knows where for FFX (same management and BOD?)
The company clearly had a mandate to raise from shareholders from the results from the resolution passed on 30/11/21, the ratification of issue of shares. Calling the placement documentation/contract a "mandate" doesn't make it one..
People make mistakes, we all do, but please BOD stop digging a deeper hole and work your way out to regain some market credibility. Admit the mistake, own it, make it hurt (by doing something like the 3 points above) then go forward with 2 great projects and market confidence in your integrity in the future.
