I note that in replying to an ASX query on 28/10/08, CXG stated that the Greentrains deal might be relevant to the share price moves, and that this deal had been disclosed in the June financial cccounts. What was disclosed was true, but what was unsaid, or tucked away in obscure nooks, was misleading silence, I think. I make three points below – namely:
1) The refurbishment work purported to have been done for a “private company” must have taken time, and I think Greentrains Pty Ltd only registered an ABN on about 27 June 2008. This is not necessary a matter that cannot be satisfactorily explained, but in the absence of an explanation it could induce concern.
2) As Greentrains and CXG are working together now to find the money to pay for the work, one can only deduce that the deal was done with the knowledge that Greentrains did not have the money to pay for the work.
3) The nexus between Greentrains, Orange Grove Brickworks Pty Ltd (a minor shareholder in Greentrains Pty Ltd) and Michael Coote (a director of Orange Grove Brickworks Pty Ltd looks to be too close. Again, this is not necessary a problem - in the absence of of information it just makes one wonder
In spite of the above, I am holding on to my CXG shares, and if I had scads of oof, I would have bought more recently.
I suspect that the Greentrains deal will benefit CXG shareholders, and my main gripe is that CXG should have been more open on this Greentrains matter. I do not mind bad news, or even the odd admission of an error of judgement, or bad luck of timing - provided the business decision was made with the right intent, and I as a shareholder am informed.
By the way, Michael Coote has been a constant buyer of CXG, which can be taken as a good indicator, provided the sums invested are significant, rather minor tickles to create an illusion of support.
CXG Price at posting:
43.9¢ Sentiment: Buy Disclosure: Held
