This is a good question, ikeeplosing.The value of this option...

This is a good question, ikeeplosing.


The value of this option depends on the potential value of the underlying assets. This is exactly the value of option is about.

Let's say you have a broken BMW in your backyard which yourself are unable to repair for the time being due to personal stress - it is worth little to you in a sense. But as a asset itself, it is not worthless. When the BMW is in the right hand, it may mean a lot.

Now the situation is not that even you give away the BMW. What happened here is Wellington got the RIGHT(I stress RIGHT but NOT OBLIGATION) here to take the BMW away if they like, when they see they can make a profit (they take the upside), and they will not take it when they can not see that they can make a profit (i.e, OCV keeps the downside), plus OCV pays Wellington the management fees (this is much more than one-off towing fees, and it is ongoing until OCV gets bleeding dry).

I haven't seen one daring fraud in such magnitude in Australia's publicly listed companies during my 16 years investing experience.

CS can recoup his loss at OCV through this backdoor transaction with Wellington alone, but OCV holders have no chance to share this potential gain.

If OCV has to give assets away, at the very least it should be a fair and open process.