Before I start this post I would like to wish all holders a merry Xmas
Although what I am about to write does not pose much merriment from my findings
DO WE REALLY WANT TO GET INVOLVED WITH EFH
As you are all aware I am a big supporter of ESI I have commended this board for carrying this company as far as they have with this India deal
But on the same footing I have been critical of this board when I have thought there a need to be.
I have made comment on more than one occasion that I believe Glen Fozard is one smart Cookie I have also made comment in the past about the BOYS CLUB and how Mr Fozard could well become to smart for his own good one day.
I have tried to put this boys club away from my way of thinking hoping that things had changed for the better in ESI
You all know from my previous posts that yes I want this stock to go the way we are all hoping, and that I have posted many times over,
that after watching the goings on @ market that I have become more than apprehensive with regards to my substantial holding in ESI
However you can go back and read that I have always taken solace that this board are in a lot deeper than I and that we are all on a level playing field
WELL HELLO THIS ALL JUST CHANGED
Ref india Project Funding Strategy
THE BOYS ARE BACK IN TOWN
This board and its so called Soph investors and we all know whom they are
Have just segregated themselves from you and I the Christmas turkeys up for the slaughter
Perhaps segregate is not the word I should use so lets say
THEY HAVE
PROTECTED THEMSELVES
from option expiry whilst leaving you and I vulnerable to the markets.
Before I go on please take the time to read this article taken from the internet there are many more, it will give you an insight as to what we could well be getting involved with
You could say below is a vendetta article for whatever reason or that the court case I have put a link to is just a one off
But I ask you fellow shareholder out there
DO YOU REALLY WANT TO TAKE THE RISK.
Enjoy the read I will pick up further down the page
Equities First Stock “Loans”
A deal too good to be true: ref Quindell -
Roll up, roll up. You are the director of a company with a thumping great holding of shares in your company. You want to get some value out of that now, but selling would rock market confidence. Selling all at once would be impossible without dropping the sale price achieved, and doing it in tranches would also drop the overall price achieved. It might be you want to buy a luxury penthouse suite in Toronto. Whatever. How can you do it?
Step forward Equities First Holdings, who have a wonderful deal: you hand over your shares as security for a loan. They charge you 3-4% a year for 2-3 years and then you pay them back and they return all the shares. Wow: I’ll have some of that. This is way cheaper than a mortgage. And miles below any bank loan.
Better still, this is a ‘non-recourse loan’ so if it all goes wrong you can keep the cash and walk away, leaving Equities First with the shares. So if the price craters, you are quids in. Equities First website even tells you that this is a great way to hedge the risk of holding the stock! All you have to do is state an intention to pay back the cash at the end of the deal and the market is happy. More to the point, your ‘director interests’ are therefore unaffected.
But is this deal too good to be true?
Firstly, the money you get is based on a 3-day average calculation of the share price. It is in your interests to see that share price as high as possible for that period. Albeit at a subliminal level, you are encouraged to massage your PR to push up the price in order to get the best pay-out. Is that market abuse?.
But there are covenants in the deal: according to a couple of these deals I’ve seen some disclosure on, there seems to be a rule that if the value of the transferred stock drops below 80% of the loan advanced then the ‘loan’ is in default. You then get a margin call or the deal ends at which point you choose whether to pay back all the money or walk away – keeping the cash but losing the shares.
From Equities First website we learn that loans of up to 75% of the stock value are the order of the day. So 80% of that is 60%. If the stock drops to less than 60% of the transfer price, a default is triggered. And if your share price just happens to have pumped up, say, 20% ahead of this deal (not unusual on the Cesspit) then you are already well on your way when the share price settles back down.
It seems to me that Equities First makes its cash by selling the transferred stock (there is nothing to stop them) and then hoping your shares will not go higher if/when they have to buy them back in the market to settle at the end of the arrangement. But we all know that the AIM Casino sees some pretty wild swings over time. It seems to me highly likely that a default will be triggered at some point during the arrangement period. In the event that you do not repay, Equities First will have made (assuming they sell the stock on receipt) at least 25% profit. And the odds are stacked in favour of that.
It is obvious that there is an in-built encouragement in all of this for Directors to issue positive RNSs. Perhaps a small Director Buy, perhaps a bit of PR puffery. But isn't this all market abuse? The very nature of the package is encouraging the breaking of AIM Rules!
Now, today, Quindell (QPP) has ‘fessed up that its deal with Equities First was not a loan deal at all. It was a sale and repurchase agreement. But if it is non-recourse, it is actually a sale with an option to buy them back. How is that consistent with an unchanged director’s interests announcement? If a director announced that he intended to buy some shares in 3 years, is that a declarable director’s interest? There is absolutely no compulsion to buy them back!
And so the very nature of this deal encourages the issuing of false director share declarations. As we have already seen with QPP today, that has happened. And that contravenes AIM Rules.
And we saw QPP today admit that the director share buys recently announced alongside the ‘loan’ agreement were misleading because the directors had, in fact, SOLD a whole load more shares than they had bought.
We also saw QPP claim that the wording of the original ‘loan’ deal RNS “followed a format consistent with announcements made by other AIM companies where directors had entered into similar arrangements with EFH”. Where did that format originate? Was it supplied to QPP by EFH (Equities First Holdings)? Whatever, this suggests to me that the directors are encouraged to issue misleading RNSs. Another breach of AIM Rules. We also know from inspection of disclosures of another similar deal with EFH that a share suspension would result in default. So if AIM were to suspend the shares because they thought this whole charade was resulting in a disorderly market and that investors had to be protected, EFH gets its winnings.
And there are other things like restrictions on when interest payments can be made (is not in advance). So if a payment date is inadvertently missed EFH wins. Of course, that also means that the director can, if he wishes, trigger the default….and walk away.
It just seems to me that EFH is just so unlikely to ever have to buy back the shares at settlement as to be a negligible risk to them that they have to buy them back at a much higher price than they sold them for.
For the director looking to offload, this is a great deal. Let’s say the shares are indeed all dumped. No change to director interests. Director retires, so no need to disclose the sale at the end of the deal. Splendid. Is that really consistent with AIM Rules?
All this, yet AIM is happy to take EFH’s shilling to sponsor (and help judge) the AIM awards, celebrating all that AIM does best. And clearly there is much of the best of the AIM Cesspit in here! But this is, of itself, a scandal. AIM is allowing itself to be bought off.
This whole thing stinks. A deal too good to be true? Well, for EFH it is too good. But all true.
- See more at: http://www.shareprophets.com/views/...-to-be-true-ref-quindell#sthash.EdcrzpuT.dpuf
So lets say they shoot for the $5mill should cover the board and the Sophs comfortably wouldn’t you think
Handing over To EFH approx for the $5mil would equate to 555,555,555
THAT MY FELLOW HOLDERS IS OVER HALF A BILLION SHARES
WHICH EFH HAVE AT THEIR DISPOSAL TO DO AS THEY SEE FIT
SO HOW DO I SEE THIS GOING
Well its not exactly rocket science is it we the xmas turkeys RETAIL get bent over once more
I will not go into detail how I personally see this panning out because I do not want to face any repercussions
EFH could potentially hold over ½ billion shares at say an average of 1.3c
I see a pump and dump coming on the back of the MPA
and then being subdued indefinately
and once we will all be crying WTFH
We will probably get another Ann saying as to the line of shareholders we were expecting to much from the MPA
TOUGH TURKEY mate your options have expired worthless wiping close on 1.5bill potential fully paid up shares that could have added to the register
At which time as happened last time lots more of L/T will exit and move on dropping their stock into waiting hands totally dissalusioned.
If they want to offer an option conversion programme then do it fair and square I put an idea forwards to Adam which he said he would put forwards
Offer up on conversion of every 4 or 5 shares converted one free share to the tune of
300 milion shares or whatever the equal division comes in at
I would happily wear the Dilution as I believe in two years time this dilution will not be a problem once true value is found
This option conversion scheme initiative would drive all options @ market and in turn drive up the heads the company would get the money in their coffers and I would get me freebies
I will state here and now that I would instantly convert 10million of my options immediately in support
For anyone that has a difference of opinion of which this forum is all about,
ok I will accept there me be holes in my synopsis
But I would like to throw the challenge down to GLEN FOZARD to come forwards and guarantee that any amount of shares that are to be transferred to EFH will not be traded @ market and locked away in escrow until such time as the shares are due to the return of their rightfull owners
And if that is forth coming then I would also like to see this in writing through the ASX channels
If this can be guaranteed I will take back all that I have stated and say no more
But if this is not forthcoming through the regulatory ASX channels
Then I would like to see a meeting set up to take onboard shareholders concerns
AND
OFFICIALLY REGISTER A DISSATISFACTION ALONG WITH OTHERS
As to the way we are being dealt with as retail Holders
IT IS JUST NOT GOOD ENOUGH
This Ref india Project Funding Strategy
Is no better than the previous Platinum road statement we got with reference to a so called option conversion programme which was about as clear as mud at the time.
It was only after the gun had been fired that we found out the extent of the reward that the members of the boys club had received,
What happened to that resolution by the way at this years AGM
WHY WAS IT REMOVED
THIS INDIA FUNDING STRATEGY IS TOTAL B/S
And before I go ask yourselves
WHY was this ann put out the day before the xmas BREAK
RATHER CONVENIENT DON’T YOU THINK
I have said before in ESI nothing is, or, has ever been done for nothing it is all well and truly calculated
That will do for now some may not like what they read I really don’t care I have my opinion and feel this is the time to voice it in light of this so called
India funding strategy YEAH RIGHT
Not very merry I know like I said this
This is not about T/U wether I get any or not it is of little to no concern it is a selfish plea from a fellow shareholder whom now has a major concern for his holdings, being as this board and its SOPHS have distanced themselves from us retail holders.
Merry Xmas everyone I wanted to get this out before the break and if it is well received will repost it again between breaks and in the new year so that it does not get buried and lost, if it is not well received then I will address my holdings accordingly if support cannot be found to question this latest QUESTIONABLE move by this board
HO HO FRGN HO
ESI Price at posting:
1.8¢ Sentiment: Hold Disclosure: Held
(20min delay)