Did Sundance do good enough due diligence on Hanlong when on 4/11/2011 they made the following recommendation to shareholders?
"Sundance Chairman George Jones said he believed the offer was attractive to shareholders."
"After careful consideration, the Sundance Board unanimously concluded that the offer represents an attractive price and provides shareholders with an opportunity to realise considerable value from their investment in Sundance" Mr Jones said.
How careful was the consideration given by the Sundance board after all?
And could have a more thorough due diligence process revealed the difference between
"a gang which is now stands accused of running a vast mafia that blackmailed, beat and gunned down rivals in daytime attacks, travelled in Rolls Royces and Ferraris and fostered ties to prosecutors and police with drug-fuelled parties"
and
“one of China’s largest private enterprises with total assets exceeding 20 billion RMB (A$3 billion) and annual sales revenue of over 16 billion RMB (A$2.48 billion). The Group has a wide portfolio of investments including mining resources, energy generation, infrastructure development, pharmaceutical, food and beverages, real estate and tourism. The Group has over 30 wholly-owned subsidiaries and more than 12,000 employees world-wide”
the description given by SDL of Hanlong when the SDL board recommended to shareholders to accept the offer?
Could it not be argued that if a more thorough due diligence process had have been completed on Hanlong in 2011 the shareholders of SDL would not now be sitting here 3 years later still waiting for the project to be developed. After all, 2011 was the most opportune time for transacting a deal on the project due to the high iron ore price and apparent high demand for new io projects from China at the time.
Maybe some of you should consider these questions before scoring the directors of your company too highly.
Maybe one of you could put this question to your directors at your next meeting, to see how they answer it.
SDL Price at posting:
10.0¢ Sentiment: Sell Disclosure: Not Held
