Ann: Becoming a substantial holder, page-15

Jim - I agree with your assessment, but looking back further, SGH's talented team of directors might effectively have been forced to bet the ranch on what was twice SGH's size and not yet proven to make cash profits (ie Quindell's PSD). The alternative might have been past 'exaggeration' of numbers to an increasingly significant extent catching up with a management basking in the glory of SGH's spectacular rise and desperate to continue to please the media and the investing community with more of the same. Overstatement of profits always catches up with those responsible for it in the end (assuming they don't run away first - impossible in this case because of the large shareholdings of the directors). The façade can continue whilst 'bolt-on growth' continues, but the acquisitions have to be more carefully chosen - and proportionately bigger - each time. I suspect the game was more or less up by the time QPP's problems came to light and the gamble was not only seen as worth taking, but a potential way out if everything went tits up and someone else could be blamed for the failure.

The arrogance and naivety of ignoring QPP's numbers in "the best due diligence ever" and declaring the fact publicly in advance of completing the acquisition should become the stuff of legends. Due diligence in this case seems to have been more about SGH understanding how the cases QPP had taken on worked, than anything else. The financials largely seem to have been ignored. PwC hadn't even finished their top-down review of everything going on over the past 2 years within QPP when the S&P completed. Now SGH is saying 'no-one told us' and claiming the lot back. AG deserves to be a laughing stock for the rest of his life. Sending inexperienced people over to integrate and drive the UK business in line with the S&G model, when there were clearly big problems brought about by a large number of people in different UK businesses only recently having become part of QPP. This demonstrated a lack of understanding of what motivates people and what builds successful businesses that was staggering.

It can't be summed up in a few paragraphs or even pages. It would take a book.

I can't tell you the contempt in which I hold

AG and others for what I see as vanity and incompetence in equal measure over a long period. The irony is that AG (and possibly others who were largely responsible for what has happened) will live the rest of their lives in relative comfort as a result of what they were able to take out of a business that probably never made returns to justify what was paid to them in all its different forms. Sadly, those who have lost their pensions won't be able to enjoy the same comforts.​

I am as certain as I can be that there was a lot there for outfits like ASX, ASIC or whoever else is supposed to monitor and control corporate conduct to find, if they were good enough, motivated enough and principled enough to have found it. I have engaged many times with regulators, who largely fail to regulate. In my experience they exist to be well-paid, push paper around and wait to draw index linked pensions a lot earlier than most when they retire in their 50s. They certainly don't want to be accountable. If they were any good, they'd be on the other side of the fence, pitting their wits against others and making some real money. ​

It's only a mater of time before the next giant bath for shareholders who make the mistake of trusting the wrong people. Very little, if anything, will change as a result of this giant fiasco. ​

I wouldn't be hanging around in SGH. The way Merrill Lynch & BofA have been set up to front everything for the hedge funds and other senior lenders tells me all I need to know about what remains to happen here. Looks to me as if the respectable bits might already have happened.​

GLA ​

all imo - dyor ​