Notes not supported by Enlitic?

I have acquaintances here in Sydney who are NAB/FIIG clients and asked me about investing in the Notes. Now that the Information Memorandum or IM relating to the Notes has been made public and comments can be made on a company that seems to have most of its operations interstate, there seems to be a few odd things that needs clarification by Capitol Health Limited or CAJ.

1. From the last CAJ Annual Report, when compared to the diagram in the IM, there appears to have been some new companies added to their corporate structure.

2. With information provided by friends in Singapore and ignoring both Capitol Treasury Pty Ltd as the issuer of Notes and the recently acquired Eastern companies, the following companies have been added to the corporate structure but not apparently disclosed to the market prior to the IM of 28/4/16 as far as I can tell;

• Capitol Global Pty Ltd incorporated 11/1/16, an Australian registered company, directors Conidi and Lewis, secretary Currie (current CAJ Board members and in-house counsel & company secretary). Initial paid up Capital $1. The one share in Capitol Global held by CAJ.
• CAJ Holdings Pte Ltd incorporated 12/1/16 – Singapore registered company, directors/secretaries Conidi, Lewis and 3 Singapore residents (assumed to meet local registration purposes), 5,000,000 shares (100%) held by Capitol Global Pty Ltd. Initial paid up Capital of $5,000,000 USD. Company is listed as an investment company.
• CAJ Investments Pte Ltd incorporated 12/1/16 – Singapore registered company, same directors/secretaries as CAJ Holdings Pte Ltd. Initial paid up Capital of $5,500,001 USD. Shares held are 5,000,000 to CAJ Holdings Pte Ltd and 1 share to a Marie Gibson, who I understand is an Australian resident/based Capitol Health employee. Company is listed as an investment company. Described in IM in the diagram as Majority but not 100% owned.

3. The amount of the paid up capital and no apparent market disclosure of trading activity for Capitol Global seems to say that it is safe to assume that monies for the paid up capital in the Singapore companies have been transferred direct from CAJ to CAJ Holdings and then onto CAJ Investments.

4. As no other announcement on another payment or transfer to date - the initial paid up capital in the Singapore companies appears to be the Enlitic investment + $0.5m USD. Otherwise the cash balances in the CAJ half year report would indicate that CAJ now has no cash left at all if the paid up capital of CAJ Investments Pte Ltd and CAJ Holdings Pte Ltd were transfers for a different purpose.

5. The ASX announcements of 28/4/16 seem to back this up when adding in the recently paid second instalment to Enlitic, the cash balance at half-year and the current stated CAJ cash holdings at 28/4/16 of around $10m AUD.

6. CAJ Market announcements on the initial Enlitic payment only refer to the $5m USD payment, not the extra $0.5m USD.

7. The IM includes a blurb about the Enlitic investment apparently as implied financial strength or support for the Notes but indicates that the Notes are not backed by any assets within the Singapore companies, as they are classified as an Excluded Subsidiary as defined by the IM.

All of the above is available on public record, but in various jurisdictions.

Questions to CAJ;

• Therefore although the Notes are unsecured, are the Notes financially supported by the total Enlitic investment asset, being not just the Australian distribution rights, or not?
• Why the apparent holder of the Enlitic investment, based on what seems to be the money trail, not 100% owned by CAJ?
• Why the one share in CAJ Investments to a CAJ employee who is not even a Director? Is the employee a radiologist?
• Does that one share not owned by CAJ in CAJ Investments Pte Ltd mean that any profits or benefits to CAJ from Enlitic in general from their operations throughout the world - except for any sales by CAJ through rights in Australia - can be quarantined and held in Singapore and only distributed at the discretion of the directors of CAJ Investments Pte Ltd?
• With NPAT being used as the marker for the P/E ratio and impact on the share price, does this mean that as a consolidated entity that any intercompany transactions between all subsidiaries within CAJ are eliminated above the NPAT line except for those with CAJ Investments – whereas the entry in the books of CAJ Investments for any transaction with CAJ or its other subsidiaries will appear below the NPAT line as “Other Comprehensive Income or Expense”?
• Why no ASX announcement as to the structure for the Enlitic investment?
• What’s the extra half mil $USD sitting in Singapore for? Expenses that do not need to be audited or disclosed to the Aust market? What sort of expenses?
• Was the above structure disclosed to the Auditors at the half year audit?
• IM dated 28/4/16 still includes a Kim Hogg as CAJ company secretary, yet ASX release dated 31/3/16 has him/her resigning. Poor draughtsmanship?
• Maybe CAJ should state the actual rather than the ultimate or parent company that Enlitic recognises as the holder of its shares that were paid for by CAJ?
• If CAJ is the actual registered holder of the shares then why the convoluted structure outside of Australian jurisdiction?
• Has the current and apparent corporate structure now introduced foreign currency risk for CAJ investors?
• As CAJ is a substantial shareholder in Australian terms in Enlitic, what sort of financial reporting can we expect from CAJ on the performance of its Enlitic investment?
• Were the Noteholders aware of the asset and corporate structure before signing up?
• Would the above points fall under incomplete corporate disclosure by the company - meaning a market not fully informed?

I cannot find anything in the IM or other related ASX announcements that would answer any of the above questions – can anyone see anything different and provide a bit of comfort? There may be some rational economic, legal or taxation reason for the structure as described, but I cannot work it out nor has the company outlined such a structure to the market. Can any young legal or accounting whiz-kid provide comments on the intercompany transaction bits as I have long retired from public practice and enjoy my golf way too much?

My interest in this company has now been pricked by looking into the IM plus the related material and I might see whatever else may be out there – Old Dog but New Bone.