Ok so I've read and reread this article from AFR.
Sidenote: IMO it's not for the ASX or ASIC for that matter to make judgement on a business model, so long as it's not illegal. Gambling, for example, could be seens as bad, but it's not illegal.
Selling a legal product, videos for small businesses, tied up to a funding line from a real lender, is not illegal. Setting up a call centre (boiler room) is not illegal. Using tactical trickery to sell a small business a product, is sales, it's not illegal, unless your doing it illegally.
So my reaction is the product and sales process is not illegal.
One could say it is ethically wrong, but that's opinion only.
As for sales people on contracts, ie: Setup as mini companies to avoid workcover etc, not sure but if one is setup as a company then IMO it's not illegal to not pay wages etc. As for a few or couple of disgruntled workers, that happens in all business, esp sales centres, where 80% of the sales people are shite, and 20% write 80% of sales.
Finance arrangement with FCC - Now when I say it's a tick, it's not illegal. Shareholders might think it's expensive, might think it wasn't disclosed correctly, whatever you think, it's not illegal to get advance payments on WIP work in progress.
If you take an advance on WIP and the lender is happy to advance you those funds, knowing the payment is subject to you doing the work and the client accepting, then I see no issue?
Should the risk of that be disclosed to shareholders, probably.
Shareholders can say that's silly, not right, dangerous, whatever, as can the market, but truth is, the lender has agreed to take the risk, whether you agree is your opinion, doesn't change the fact that that is how the business is being funded upfront. The WIP (BRTV) and the advancer (FCC) have agreed with each other, under the terms they have come too, it's that simple, and IMO again not illegal.
Shares have been issued to parties for "services provided", one could say these are paying mates, who knows really? Again not illegal to issue shares for services rendered, the only real issue here is issuing shares now or contactually for the future and NOT anns it to the market.
For mine, that is a non disclosure issue, and the company needs to be penalised, and not do it again.
Then there are the cash receipts.
Technically, if one was to really look at it, they are cash receipts, the "lender" is advancing funds to BRTV for WIP on behalf of the client. I think the way BIG has represented the cash receipts is very questionable, and probably need to reinstate the financials accordingly, and could be seen as being deceitful to the market, but that's just an opinion, legally did they do anything wrong? I don't know.
So the best I can really hang on BIG is non disclosure issues, for which they will probably be fined.
The financials, is the auditors problem, not BIGs IMO.
As for whether you believe in what BIG are doing as a business model, whether you believe they are ethical, whether you can understand what the true financials are, that's something only you can decide.
I am and was the harshest critic of BIG, but let's put some perspective on it.
Legally wrong, hardly IMO, ethically wrong, probably.
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