Finally this travesty is over and the carcass of this stinking company is buried. After a decade of mismanagement, stupidity and corruption, the chairman of the board will get his $300k bonus, the fool of a CEO walks away with his $1m salary paid out, and the senior executives get their lucrative settlements, while any shareholders who bought in at listing and held till today have lost 85% of their money.
It's tough to make a call on the worst thing about iSelect, the list is so long. But from all the incidents in this debacle, I think the Academy Award for Most Repulsive Action by a Board goes to a recent one: the purchase of a majority stake in CIMET for $26m, weeks before the IHA takeover bid was made public. ISU spends the last of its fast-dwindling cash reserves to buy a majority stake in a loss-making company for a hugely excessive price, then soon after announces it is being taken over itself. The takeaway? IHA wanted CIMET, so got iSelect to buy the company in order to have it included in the takeover. Not only do they get two companies for the price of one, but the share price of iSelect was smashed after news of the CIMET deal, making the takeover cheaper (down from $0.40 per share offered a year ago).
The ISU board can truthfully say it was acting in the best interests of shareholders by selling to IHA, because 30c is better than sub-10c, which is where the share price would've ended up after the CIMET fiasco and the appalling FY results. You can make a good case for directors' stupidity over the CIMET deal, but it would be hard to prove criminal collusion.
iSelect is a great example of what you can get away with in Australia while ASIC is the "corporate watchdog".
ISU Price at posting:
29.8¢ Sentiment: None Disclosure: Not Held
