Having worked in both Capital and Investment markets for almost...

Having worked in both Capital and Investment markets for almost 20 years, let me share an experience from late last year.

We had a client who was a 'Captain of Industry' prior to the GFC. He was top of his game, and everyone in the business world wanted to be associated with him when he was on TOP.

Long long story short, the GFC almost wiped his empire out, infact I can confidently say it did. As the world emerged since the GFC, credit markets, wholesale funding and securitised lending markets are all still but a tiny fraction of what they were. Long and the short of it, even good credit risk today finds it very hard to access funding.

At the start of last year, I read an article about a very successful property developer who came forward, admitting that he had been cheated, fooled even by a firm promising him a line of funding out of the US. All he had to do was pay a $200K establishment fee, and pass their funding analysis. Well, he passed the analysis, and then was asked to pay the fee, which he happily did.

The funds never came....and the reason he came forward was because this developer since spoke to a few other well known identities who were also sucked into the same scam.

I personally saw the full page ads these guys put in various financial press last year, offering cheap funding lines from the US.

The problem with a crime like this, is that the person who is tricked will never come forward admitting their stupidity, as this just defames them in the public domain.

In short, we were able to arrange a line of funding from one of the big 4 commercial Ozzie banks, but it was short of what he needed. It required him to put in more capital, more of his own cash. At this point, our client told me he was introduced to someone who was able to arrange the funds he needed. They asked for very little background info on the deal, NO info on his P&L or evidence of his balance sheet....and surprise surprise, the deal was approved. Just pay our $200K application fee and the first tranche of lending will arrive the following week.

Well, I begged our client not to proceed and obtain more information. I told him about the scams going around, but believe it or not, instead he negotiated the fee down to $50K. You know how the rest of this story pans out.

My question is this, if Monash genuinely thought they had a 3rd party investor, but that party is no longer there, for what ever reason....how would the parties involved handle this?

There are so many ways this can or could have played out, but since this has been dragging on for so long, holders really must be suspecting the worst at this point.

I dont hold, but have been watching from the sidelines for a little while now.

The board must do a better job updating holders of the situation with Monash, so that holders can decide for themselves if they are still prepared to support this business.

Kiril.

Please note, I am not suggesting for a moment that what I experienced is what is the situation with Monash. Just that there are a hundred different things that could be happening behind the scenes....and shareholders deserve to know where they stand now on this specific issue.