re: Ann: First Aircore Drilling Results from ... Investegate I'm...

re: Ann: First Aircore Drilling Results from ... Investegate

I'm a little dissappointed, I presented you with several examples of mismanagement but you only assume I'm down ramping to take a long position.

Here's another example of questionable management:

11.48am on the 14th of September 2012, ENT issues a trading halt on securities for market sensitive announcement regarding Doolgunna/Nova.

18.48pm on the 14th of September 2012, ENT issues a Change of Directors Interest Notice and the directors allot themselves 8.5 million (3.2% of ENT's market cap) low strike price (17.7c) long maturity (36 months) options, with the issue date set at 72 hours prior so of course, so doesn't instant red flag with the allotment of directors options after a trading halt was issued.

Then not even 72 hours later shareholders are issued with a notice of a meeting to spin off ENU. Now the devil is in the detail here, within the General Meeting notice:


Impact of Demerger on ENT Optionholders

20. The effect of the capital reduction on ENT option holders will be to reduce the exercise price of Options on
issue but not exercised by the Record Date. The exercise price will be reduced by the Reduction Amount,
ie. the same amount as the amount returned in respect of each ENT Share, in accordance with the
requirements of Listing Rule 7.22.3. The number of ENT Options on issue will not change as result of the
reduction of capital unless any Options on issue are exercised before the Record Date.

Basically making those fresh long maturity options they gave themselves an even lower strike price, which seem's reasonable based on the dilution factor but the timing seems all to convenient

Now here's the even more questionable bit! Dr Zuen Huang, a Non Executive Director with no personally acquired securities in ENT is alloted 900,000 options, with the same generous terms shown above. Seems ok right? He sat on the board why shouldn't he have a piece of the pie?

Then 4 weeks later the same director, Dr Zuen Huang resigns for appointment to the ENU board, and walks away with 900,000 low strike price options. Whats the problem here?

Why do we grant Directors options? As an incentive to create shareholder value, to motivate them to seek out worthy exploratory ventures that will cause the share price to appreciate...

What ENT did was allot a director 900,000 long maturity super low strike price options when 4 weeks later he walks away? How are those options which dilute shareholders holdings creating value for them, the guy left 4 weeks later? And you cant say ENU wasn't in planning for some time.

He's a non executive director also, so not responsible for day to day running, Out of the 9 director meetings in FY12 he attended 7. So this guy got 128,571 options for each meeting he attended. Tell me investegate as a shareholder, for an additional 900,000 options did this transaction create value? Given the director has now left the company.

Why they deserved those options also is beyond me, they created no shareholder value in FY12.