Loading up the truck, page-2845

Oh give up will you, Alex. You're outgunned and you're not doing your reputation any good. Don't say anything anyone.

"it could be as simple as a reasonable belief a deal will be done with lenders".........

........yes - that's how it goes in the big firms, Alex. They have a guess.
"Hey Bill, I've got to sign that report tomorrow, what do you reckon those lenders will do"
"I dunno - have you asked them?"
"No - they weren't very nice when I tried last time - told me to go do one"
"But they didn't say they'd pull the group facilities, did they"
"No"
"Well what have you got to lose? You can always say you had a reasonable belief. Just get the thing signed, it'll probably be ok"
"Great - I'll do that. Thanks, Bill"
"You're welcome, Sebastian - anything to help"
"Shall I put the kettle on?"

The date of the corporate advisory firm's appointment was presented as being very recent when there is no evidence to suggest it was. It's ok for The Australian to do that because it's a good story.

Re: "Here it could be as simple as a reasonable belief a deal will be done with lenders. There may be nothing for shareholders in such a deal. Why would there be, if the business worth less than the face value debt? But given bad news flow, absence bad news is kind of good news worth celebrating, I agree"........

........you seem to be confused, Alex. I have only talked about E&Y signing a clean audit report on - 31 March 2016 - on a set of accounts of a company it knows there is significant doubt would be here in 12 months' if the parent company's borrowings were to be called in. E&Y knows (because it's clever) it would be in deep trouble , with all that has been said and written about SGH's difficulties over the past few months (whether it is true or not) if it was found not to have raised the issue of going concern in any way in its audit report, when the company it was reporting on, either on its own or through the insolvency of its parent to which it was at all times intrinsically tied, were to fail within 12 months.

So it had a guess.

The former finance director, who was responsible for providing financial information to the market that proved to be something of a moving feast in the latter part of 2015, went last year. I am not aware of any financial guidance about f/y 2016 outturn having been given in calendar 2016. The last 'corrected guidance', as far as I can tell - I might be wrong as I haven't checked absolutely everything because I'm not being paid to, unlike E&Y - was on 17 December - 5 months ago today. This was followed by the release of the H1 numbers on 29 Feb, which is what everyone was surprised and even shocked by. Delighted by in the case of a few on here seemingly. Were you shocked or delighted, Alex?

It might help put some perspective on the situation if people were to consider carefully what was said on 29 Feb. The last few pages are particularly relevant. The first few pages have been debated to death - but not the last few:
http://www.asx.com.au/asxpdf/20160229/pdf/435fwmsxbxl71m.pdf

This is great. So many people giving me chance after chance to make the points I am doing time after time. I shall never stop. And each time I'll give another reason why it's unwise to listen to certain people (ie those who do something that's completely different to what they claim to be expert at - posting their opinions on here challenging those who actually are (or at least were) paid to be experts. I don't mind telling you this time it was PwC I was a partner in.

OK - I'm making it all up. Someone on a board I post on in the UK told me recently I must make a lot of lucky guesses because it isn't immediately obvious I'm a fake.

Why doesn't someone send an email to the journalists who have been spreading the muck about SGH (with a copy to the financial editors) suggesting they ask their own accountants about the significance of Ernst & Young signing a totally clean audit report - on 31 March 2016 - ie one that didn't refer in any way to going concern, on SGH's UK subsidiary which is firmly tied into group borrowings in the way described in the accounts. Invite them to ask their accountants, based on its clean audit report, what E&Y is likely to think the chances are of the parent being asked to repay all $800m or whatever it is of its debt inside 12 months.

You might advise them that if they don't publish what they're told, just for posterity you'll be sending a copy of some of their past articles - and any future ones implying the prospect of SGH's insolvency - to the ASX, SGH and their own regulatory authority: http://accountablejournalism.org/ethics-codes/Australia-AJA, just so they know they had the opportunity to establish the most likely position before misreporting it.

And the next one please.............no, hang on a minute. Use this as a standard reply while I knock out a few zzzzzzs.

See y'all on the morrow.

Good stuff Alex - thanks.