AFR Article

New AFR article by Jonathan Shapiro

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Big Un Limited's stock gained 12 per cent in trading on Monday after the company told shareholders that its chairman Hugh Massie no longer controls shares issued to him, while stating it will issue no further shares to FC Capital under its current agreement.
Shares in the company had dived 40 per cent from $2.75 to $1.60 on Friday after the online video company admitted that its customers are advanced funds by a Sydney financing company called FC Capital.
That came after The Australian Financial Review questioned the company about its tie up and revealed that the company had been issued with over three million shares.
Big Un's admission that it was issuing shares to a company that was financing its customer's payments raised questions about the company's disclosure

A statement to the Australian Securities Exchange said the shares were issued as part of an agreement struck in November 2016. The shares were issued at 20¢ per share at a time when the share price traded at 16¢ per share.

"The Company's directors remain confident that the purchase of and payment for stock made by FC Capital remains commercial, at arm's length and satisfies corporate governance requirements," the company said.
"These are the only shares issued to FC Capital, and no further securities will be issued pursuant to this agreement. Financing arrangements with FC Capital remain in place for BIG customers,"
The statement reassured shareholders who bid the stock up by 12.5 per cent to $1.80 in heavy trading.
Big also sought to clarify revelations raised by governance and accounting firm Ownership Matters that Mr Massie may not have sufficiently disclosed his interest in the company.

The Ownership Matters claims were detailed on Friday, by the Financial Review.
In Tuesdays statement, the company said Mr Massie had transferred ownership, control and beneficial entitlement of shares held in an entity called Coddington to Gajah Investments, a significant shareholder in Big Un prior to becoming a director in the company.
Big also used the shareholder update to reiterate its policy of issuing stock to pay "strategic suppliers".
Big had been the top performing stock on the Australian Securities Exchange in 2017, gaining 1,600 per cent as cash gushed in from small businesses keen to pay for online video content.

These include technology firms and strategic and corporate advisors.
"The issue of script in return for services has been carefully considered and taken to ensure the best outcome for all shareholders," Big said.
"It is the view of the board that this strategy has bought better alignment with Big in the long term."
Big's frequent issuance of shares at deep discounts, it decision to switch audit firms from PKF to Rothsay Resources in West Perth and its founder's past run in with regulators had made some investors cautious.

On Thursday, Rothsay senior auditor Graham Swan leapt to the defence of Big which he said the firm had audited prior to its listing.
"Since our appointment to the audit of Big Review TV Ltd for the year ended 30 June 2013 and our subsequent appointment to the ASX listed parent in 2016, we have issued unqualified audit reports," Mr Swan was quoted as saying in an ASX statement.
However details of the year ended June 30 2013 audit have proved hard to locate.
Big Review registered as a business on May 30th 2013, according to ASIC filings.

The November 2014 prospectus stated in the prospectus lodged for its backdoor floatthat Big Review TV had "yet to go through a formal accounting year end as such its accounts are unaudited."
"I'm in the car at the moment. I'll get back to you. You have a nice day," Mr Swan said when contacted on Monday seeking clarification about the 2013 audit.