Just had a close look at the prospectus which had the grinning...

Just had a close look at the prospectus which had the grinning dickhead chairman Peter Smedley offering shareholders the right to buy more shares an an "attractive" price of 48 cents per share.

In the key risks section of the document, the usual events were there, including the risk of a volatile (i.e. lower iron ore price) and exchange rate in potentially impacting the future financial performance and balance sheet of the company.

That is true and the board cannot forecast those with any certainty (which also begs the questions why they borrowed A$600 million to buy WPG only 3 years earlier in what is a very cyclical industry - and with a break-even costs delivered to China 200% - 250% higher than BHP or Rio Tinto). Oh, and the freight costs to ship to China are 40% higher than iron ore shipped out of the Pilbara.

But here this everyone: - the board of Arrium would certainly have known that if the future price of Iron Ore drops below the break-even price of US$73 per tonne, what the closure costs of Southern Iron would have had to be and the ongoing costs due to the 5 year take and pay contracts the idiots agreed to and signed - and from what we now know, does not expire until June 2017.

Does this represent inadequate disclosure from the board when it offered this rights issue???  Or will they argue that these matters should only have had to be disclosed at the point in time when Southern Iron was closed (which happened only 3 months after the capital raising)

This is something the lawyers will have to consider in court on behalf of very pissed off shareholders.