An Investment cas, page-55

@friendlydwarves thanks and good stuff. Always good to know more rather than less as a minority shareholder.

@dannytwo my interpretation of the "no margin" situation with SMS is that SMS was essentially the prime contractor in name only. Nathan wanted the 20% margin for MSV only and/or didn't want his financial interest in Kirkalocka to be disadvantaged by SMS adding a typical prime contractor margin on top. Maybe he even had the foresight to want some financial protection for MSV because he knew SMS had significant financial resources relative to the somewhat speculative nature of Kirkalocka.

None of this would seem to indicate that Nathan was favouring his own private interest in Kirkalocka over that of the minority shareholders in MSV. In fact you could probably argue he was generally acting in the best interests of MSV. He initially declined the contract because the margin wasn't high enough and only agreed to do it if SMS was willing to forfeit it's margin whilst remaining as "guarantor".

For me it is more of a trust issue. These (alleged) facts are just the complete opposite of the whole "Nathan was just a passive shareholder" story that the company and Nathan himself tried to spin. It smelled fishy from the start and ultimately I think it was manifestly disingenuous.

Does this story reveal Nathan to be some dodgy con artist ready to fleece minority shareholders for personal gain at the first available opportunity? Absolutely not imo. Does it confirm everyone's suspicions that he wasn't forthright in explaining the situation on the earnings call? Absolutely yes. Does it change the investment thesis for MSV? That's for each investor to decide for themselves.

As for the alleged operational issues and the potential impact on MSV's ability to recover the amount it alleges is owed, I simply don't have the expertise to comment so will leave that to others.