Seals, hi. Thanks for the info on Jordinson's whereabouts. I thought the directors were responsible for the choice of accounting policy and that where the directors choose an accounting policy different to what the accountants consider to give a true and fair view that the accountants comment to that effect in the auditors' report. It is too much of a coincidence that the first thing Mr Jordinson did on becoming MD was to write down Mehdiabad (stinks of clearing the decks and putting the blame on previous MD?). I also know accountants have to apply objective tests in some circumstances, but it is too much of a coincidence that such tests should suddenly fail the moment Mr Jordison is appointed MD, so I don't think it is just Mr Jordinson recognising the market not giving much value to Mehdiabad and deciding to impair the balance sheet, and if MDs were supposed to mark to market, they should have been impairing the balance sheet a bit at a time surely and not doing it in one massive hit of $18m?
I am curious about which version of the bidder's statement will be sent to MAK shareholders. Will it be the one with all the red corrections and blue additions or will it be one where you can't see so clearly what has been changed? I am also curious about why MAK's change in substantial interest notice was issued a second time showing, this time, on which days they forced down UCL's share price. Is MAK trying to tell us they have the upper hand and can make UCL's offer look terrible any time they feel like it or did UCL force this additional disclosure out of MAK through a complaint about MAK not obeying Australian rules on stake changes during a bid?
The things that worry me about Jordinson are: 1. It is common for new MDs to tailor a company's assets to suit their circle of competence rather than put in effort enlarging their competence to cope the company's assets. I don't know if Jordinson is guilty of this. I don't see any evidence of him studying Persian. 2. Some MDs are over promoted project managers. The number of mistakes in the bid and the fact Jordinson's knowledge on Iran is poor if the reports and presentations are anything to go by may be an indicator of this. I suspect Drummond played a large part in Jordinson's appointment, and Drummond was never going to appoint anyone smarter than himself (the Cliff Lawrenson appointment was an exception?). Jordinson's MD record at CRC may also be evidence of being an over promoted project manager. 3. It is common for directors to confuse self interest with increasing shareholder value when both goals conflict. If Mr Jordinson succeeds in making himself MD in charge of Wonarah as well he will be entitled to a bigger salary, so there is every reason for him to give us a load of flannel on the need to take over MAK. Most takeovers never achieve the benefits and savings they are supposed to - they destroy shareholder value more often than not. Jordinson's "explanation" that Sandpiper will be easier to finance is not an explanation at all. The fact is the lenders can be adequately protected by making MAK and UCL jointly and severally liable for each other's debts to the lender. It is timing the raising of the equity to suit both companies equally that is the hard part (as well as the fact that they will be in competition with each other for a scarce supply of investors). It is in his interests to tell us a load of pap. 4. He omits to tell us why exchanging an interest in a viable mine with no exploration risk (Mehdiabad) for one with exploration risk (Wonarah) is a good idea. He may be investment innumerate. 5. Vanity share consolidations and vanity company name changes and quarterly reports plastered with contradictory statements between the highlights and what is in the detail are signs of a competent project manager overpromoted to MD. 6. Changing shareholders' betting slips should never be done without an exceptionally good reason. Jordinson has failed miserably to communicate any such good reason, and what reasons he has suffer from the suspicion of his self interest overriding that of maximising shareholder value. 7. Any assessment of Mehdiabad should start with the prospects for regime change in Iran or for winning an arbitral case (depending which route he wishes to go down to out value from Mehdiabad).
If he is ever to get my support (not that my support matters with around 5.3m shares divided by thirty) (what a mouthful) he will have to rectify all this in the forthcoming quarterly statement. Sorry about the rant. All the best.
UCL Price at posting:
17.5¢ Sentiment: Hold Disclosure: Held
